Tag: business performance

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Accountants and Small Manufacturers

rollingballGetting in Front of the Ball

There’s a lot more to accountability in a manufacturing or inventory-based business than simply keeping track of money in and money out.  Particularly in an economy when nobody can afford to build or stock products too far ahead of demand, it is essential that these businesses have a means to not only track and manage purchasing, manufacturing, distribution and stocking activities, but to understand conditions or trends which impact the flow of materials and cash through the business.  Further, this understanding must come in a timely manner in order for the business owner to make decisions and take action when it matters most.  Unfortunately, many business owners find themselves “behind the ball”, constantly pushing to make forward strides, and often due to not having the information they need to make business decisions that matter now, today.

Why is it so critical for these businesses to have more and better information to help them make strategic decisions and answer daily operational questions?  In a word: connectedness.  The Internet has truly made the world smaller when it comes to participation with even the smallest of local businesses.  Globalization of markets has impacted manufacturers in significant ways, and these businesses (like so many others) must now be prepared to address the realities of global supply chains, outsourcing, and a remote or mobile workforce and market.  While many of the software solutions addressing the functional business requirements of manufacturing and inventory or warehouse management are “locally implemented” solutions, extending and integrating these solutions to address the new global and mobile paradigm may represent a significant expenditure in time and resources for the small enterprise.

Application hosting and web-based solutions have emerged to help businesses address the need to “modernize” legacy applications and enable greater levels of system management and access.  Introducing the applications into a centralized and remotely accessible environment allows the business to immediately deliver the necessary support for remote work and mobile access, and positions the system to facilitate collaboration within the business and with outside participants, such as outsourced bookkeepers, accounting and finance professionals.

These professionals can be instrumental in assisting their clients manage the change to new collaborative computing paradigms.  Where accounting was previously viewed as an after-the-fact process, accountability through detailed activity tracking and reporting is now a focus which begins at the front end of the business, and accounting professionals are finding far greater value in helping structure and manage this daily activity in order to deliver greater operational information and insight.  Rather than being the last people to know what is happening in the business, accounting professionals are recognizing that their ability to positively impact business performance requires getting “in front of the ball”, initiating process structure, data control and collection which ultimately results in better and more informed decision-making through better and more timely access to more meaningful information.

Businesses at all levels are realizing that new computing paradigms can ease the burdens of collecting and sharing information, yet most small companies need help in determining exactly how to approach this “enabling” of the business and systems.  While accountants are also experiencing dramatic change in how they do business, it makes sense for them to embrace the opportunity and recognize that enabling client systems will ultimately allow the accounting professional to work more closely and to deliver more tangible value to their client on an ongoing basis.  Online accounting approaches are no longer a fad but are the new reality supporting how many bookkeepers and accountants work with their business clients.  Extending access beyond accounting and bookkeeping systems, and incorporating support for operational and line-of-business solutions, is the next step which will bring the accountant closer to the client business, and position both to benefit from deeper collaboration and useful insight.

Make Sense?

J

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Knowledge, Sustainability, and Succession

Knowledge, Sustainability, and Succession

In a global economy, where competitive pressures are increasing every day for even the smallest of businesses, sustainability becomes as much a focus for the business as growth once was.  Developing strategies for retaining profit margins, improving cash flows, solidifying supply chains, and streamlining operational processes is essential when designing the business to handle the stresses of a depressed economy.  But knowledge management – investing the learning and experience of individuals into the DNA of the business – is also an essential element to sustainability and business continuity.  When the entire realm of understanding of how the business runs exists solely in the proprietor or founder, there is little foundation upon which to build an enterprise.  However, when this knowledge is turned into systems and processes which guide the operation, results are able to be reproduced consistently, and reliance upon key individuals is reduced significantly.  This aspect of succession planning is often overlooked, but is THE essential element in business continuity.

Accounting professionals are trusted advisors to their clients, and provide much more service than simply financial reporting.  The consultative approach, delving deeper into the business and looking beyond the surface-level numbers, is what business owners are looking for.  You can help your clients see beyond the numbers to find ways to improve efficiency and profitability in the business, and to help turn individual knowledge into business knowledge, crafting a plan to retain and build on that value.  That’s what sustainability is all about.

Make sense?

J

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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…