Tag: bookkeeping

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Accounting Professionals, You’re right – your clients don’t care about the numbers.

Accounting pros, what your clients care about is how they’re doing and if they’re on the right path.  Are you helping them understand that, or are you just the guy who works with the numbers to make sure they’re accurate?

Accounting professionals are having a hard time of it right now, with clients demanding more insight and assistance in helping to build value and profitability in their businesses, yet accounting professionals continue to be mired in the details of the numbers.  It’s like the old saying about not being able to see the forest for the trees.  You spend time in the trees, counting trees and making sure the trees are properly categorized, but are you seeing how this group of trees performs compared to others in the forest?  The analogy isn’t that far off.  You see, if there are other trees in the way, or if it doesn’t rain enough, the tree won’t grow and thrive.

This is what it’s like out in the world, where your business is just one of many.  It’s not like you can grow and thrive no matter what others are doing. If they’re bigger than you and take all the light, then you can’t grow.  If they take all the nutrients and resources, you can’t grow.  If it doesn’t rain, you can’t grow.  Somehow, some way, you have to find a way to stand above the others, get the light and the resources and the rain.  Someone in the business should be paying attention to this bigger picture, and it is often the business owner.  Their accounting professionals, on the other hand, tend to remain in the dark, below the sun, counting numbers because the owner isn’t interested in counting.  The owner is interested in growing.

Accounting is about numbers, but growing a successful business is about numbers and strategy.  Historically, the numbers tell you how the business has performed up to this point.  Adding in the elements which speak to strategy, you can then look at what your potential performance will be in the future, and then make the necessary adjustments to make sure that the potential is realized.  The accounting professional acting as a small business CFO must be prepared to help business clients look beyond the numbers to their meaning and what they say about the business today, factoring in elements relating to business strategy and market forces to reveal what they indicate about the future.

Accountants, it’s time to recognize that you are the only ones really worried about the numbers.  Business owners just want to understand what the numbers mean and what they can do about them.

Reducing costs and managing expenses and cashflow is critical, yes, but how many business owners actually know what they’ll be up against when looking for financing, or a buyer? Or do they even realize that they’re not on the path they wanted… building something valuable they can leave to the kids? Sure, the cashflow may be there, and they’re taking a healthy monthly salary… but does that really tell the entire picture or show them where they’re likely to end up? No, it doesn’t, and every accounting professional knows that truth.

While it’s true that bad accounting data turns into bad decisions really fast, it’s also true that too many accounting professionals THINK their client’s don’t care about what the numbers SAY just because they don’t care about the numbers. I would suggest that maybe small business owners care far more than their accounting professionals recognize… and they care about building value and not just accurate digits.  This is one of the reasons why KPI dashboards, dynamic reporting tools, and business valuation solutions are so popular among small business owners – they are able to have a conversation with their business data that their accountant isn’t having.

Can self-help reporting and valuation tools be useful to business owners? Well, that’s sort of like asking if trying to figure out what you’re worth (or not, as the case may be) will hurt your business.  Information is power, and every business owner wants to believe they have the power to succeed in their own hands.  Just because they’re not having this conversation with their accounting professional doesn’t mean they’re not thinking about it.  Maybe they’re just not asking and the accountant isn’t offering.

Accounting professionals, go ahead and continue to monitor KPIs and crunch the numbers and show cash flow (real cash flow, not just today’s bank balance). But if your client had 1 hour per month to actually spend working ON the business (on the forest), trying to make sure their business is heading where they originally planned to go with it, wouldn’t it be a good idea to show them where to spend that time?  Yes, it would, and adopting the use of realtime reporting and analysis tools for business clients can help do that.

Data dashboards and decision-support solutions are important tools which help business owners understand their businesses better.  Rather than viewing these tools as dangerous or competitive, accounting professionals should view financial analysis, business valuation and KPI reporting tools as something they can use to help build value in the information they develop, rather than trying to convince clients that the value IS the information and not the guidance it suggests.  The data won’t make the tree grow, it’s the guidance that feeds it.

Make Sense?

J

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Bookkeeping and Benchmarks – Getting the Numbers Right

I am a big fan of business analytical and reporting tools.  I very much believe in using industry benchmarks as a means to understand various aspects of business performance as it is compared to others.  I feel strongly that this type of information is essential at all stages of the business, and is useful for planning and forecasting as well as in daily business management.   There are a lot of tools available now which provide KPI (key performance indicator) reporting, dashboards, and industry comparisons.  The thing that none of these tools provides is an assurance that the underlying data is any good.

For data-driven reporting and analytical tools, the reliance upon customer- reported and accumulated benchmark data is both the benefit and the problem.  Drawing upon actual customer financial data is what makes the reporting solution useful – reflecting the realities of the business as they are revealed in the accounting data.  The problem is that the data will often be flawed in some manner due to the lack of accounting knowledge of the user.  Particularly when small business owners take it upon themselves to perform their own bookkeeping work, there is a large potential for the information to be incomplete or erroneous, or at least not truly reflective of the business finances.

It is essential that accounting professionals be involved in the accounting process to ensure the accuracy of the information presented to any analytical and reporting solution, thus improving the quality and value of the information.  Further, I would suggest that accounting and business professionals would look to these types of tools to assist in the identification of issues or conditions which exist in the business requiring attention.  Business owners would get far greater value from the services of their accounting professionals, and accountants would deliver a much higher level of tangible value to their clients.

If the accounting professional is not regularly discussing business issues and conditions with the small business client, the client can use their own tools to attempt to gain the insight.  HOWEVER (note the big letters), any small business owner who tries to do their own books and use their own decision-support tools is likely to run into problems. While it is true that some accounting professionals are not offering the level of guidance and insight (“value intelligence”) that some analytical and reporting solutions might try to offer a small business user, suggesting that the DIY reporting tool is useful when coupled with DIY accounting is questionable at best.  Why?  Because most small business owners and untrained bookkeepers do not know how to perform proper accounting.  And bad accounting data turns into bad business decisions really fast, even with the coolest-looking reporting tool.

badaccounting

What’s the bottom line?  The participation of a qualified accounting professional is necessary to make sure business bookkeeping information is properly accounted for, even and especially when great tools and solutions designed to help small businesses get their work done are being used.  The accounting professional is necessary to make sure information is classified correctly, connected and associated with the proper supporting information, and that the data is complete.  This is a lot of work if done on a regular basis (which it should be) yet many accounting firms don’t even offer the service, or offer it affordably.

Accounting professionals working with small businesses, look at it this way: it makes more sense for you to engage a contract bookkeeper and make a bit of money on the work they do to serve the client than it does for you to

a) lose the client to an accountant offering bookkeeping services, or
b) charge the client to re-write up the information, which isn’t really profitable for you and isn’t as valuable to the client

Serving larger businesses may provide firms with an ability to be more selective of the services they offer, but small business accountants need to take an entirely different approach.  Small business accounting professionals need to be full-service providers and help clients get the complete range of services they need, including daily bookkeeping.

Accounting professionals helping their small business clients get complete service – from basic bookkeeping to insightful planning and advice – that’s the benchmark for high value accounting in the world of small business.  It’s the only way to make sure the numbers are right, and that the business owner is looking at the right numbers.

jmbunnyfeetMake Sense?

J

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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.

Make sense?

J

Read more about hosted QuickBooks desktop editions

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

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No Fear and Loathing in Accounting

It’s not my father’s accounting firm any more.

Nobody’s bringing in paper forms and shoeboxes full of stuff, or plastic tubs full of paperwork, and we’re not trotting off to the bank to pick up a lot of bank statements, and we’re not manually reconciling checks and that sort of thing anymore.  It’s not like my father’s accounting firm any more.  We’re beyond that.

You’ve got to be, maybe, 50 plus years old to remember what it was like to do things with the old computers, the batch processes… or before that, when everything was done with paper forms, and almost everything was done completely manually.  Even with computers, you had to re write-up the check register, you actually had to write-up all the information, so you could input it into the computer and come up with a trial balance, and then do the rest of the work from there.

But anybody who’s maybe 55 or less (you see a focus on these people in a lot of technology awards programs – like the 40 under 40 and those sorts of things)… these are the guys that look at network and running the programs on your local computer as being the “old” way, and these are the guys that have adopted the technologies and work with the clients who demand the capabilities that these technologies can afford.  These people are more competitive, they’re more agile, they produce a higher quality of service to the client, and at the same time they’ve been able to leverage these technologies to increase the efficiency of the practice to the point where they’re not working harder, they’re working smarter.

They’re taking advantage of the fact that the technology does a lot of the work and the mechanical processing, allowing the professional to really use the talents and skills they’ve developed in providing insight and guidance to their client businesses.  And it is these people who have adopted the technology and who have adopted the way of thinking that’s going to allow them to continue to be more relevant and more important, more critical, to their client businesses, and to the market in general, on an ongoing basis… because these people know that there’s no fear and loathing in accounting.

These people know that accounting is exciting

Accounting is every aspect of the business.  Accounting is process automation, it is data collection and control, it is business analysis.  Accounting in today’s cloud economy is a cornerstone of making the most of every asset and every resource and every capability that the business has.  It starts with the professional practice, and once the professional practice adopts this mindset and this way of approaching business, then the mindset will flow down to the clients, and the professional practice will be in a position to grow the small business clients into midmarket clients and into enterprise clients and beyond.

Make Sense?

J

What’s up with the bunny feet?  Well, it’s all about the bunnies.  You know… like being able to work when and where it’s right for you; being able to work from home or on the road or on vacation – or at the office if you really have to.  But mostly it’s about mobility and access and being able to work in your bunny slippers.

Just remember: they can’t see your feet on a conference call 🙂

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