Tag: data analysis

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“Business as Usual” Isn’t Cutting It

“Business as Usual” Isn’t Cutting It

For a lot of businesses today, “business as usual” just isn’t cutting it.  Competition is getting more aggressive, and clients are demanding more while margins are shrinking and the cost of operating the business just seems to go up.  Business owners and their CFOs must recognize that it’s time to change the way they operate.  By leveraging innovative technologies and cloud solutions, it is possible to transform the way critical business decisions are made and to radically improve how the business serves their customers, empowers their sales force, and keeps mobile workers working.

Business intelligence comes from all aspects of the business, not just accounting and finance.  Particularly in volatile economy, where uncertainty weighs heavily on each and every business owner, it is essential that the business make the best possible use of its information assets to eek out every bit of insight it can in order to not simply survive, but to find a way to identify and capture opportunities which will propel the business forward.

Data is just data, but information is power.  It takes skill and experience to turn raw data into instant insight, and this is where accounting and finance professionals should be placing their focus.  With a wise and intelligent approach to “enabling” businesses with tools to help streamline and improve process effectiveness, and structuring systems to capture and integrate data throughout the operation, CFOs and accounting professionals can assist their business clients in turning operational and financial data into actionable information supporting better decision-making.

Make Sense?

J

Read more… What will my business be worth when I need it to be worth a lot?  Your Exit Strategy

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What will my business be worth when I need it to be worth a lot? Your Exit Strategy

What will my business be worth when I need it to be worth a lot?   Your Exit Strategy

An exit strategy, as defined in Wikipedia, is “a means of leaving one’s current situation, either after a predetermined objective has been achieved or as a strategy to mitigate failure.”  With planning, a solid approach to managing business finances and operations, lots of hard work and a little luck (and more planning), your exit strategy from the business will look more like something from the first category rather than the latter.

It’s important to note that having an exit strategy doesn’t necessarily mean that the sole purpose of the business is to sell out for a bunch of money – not right away, anyway.  For many small business owners and entrepreneurs, the exit strategy is really about where they want their businesses to be in the future, and what they hope to get from it now and later.   For every small business owner, it is a balancing act between meeting today’s needs and reaching tomorrow’s goals.  The “Exit Strategy” is the essential plan for recouping the capital (money, time, effort) that has been invested in a company, whether that “recouping” happens earlier or later.

Not every business owner is in business to become a Fortune 500 company; some small businesses exist largely to support the lifestyle desired by the owner, and to perhaps leave a legacy behind for the heirs.  As with any investment strategy, a well thought out plan must be developed and followed in order for the entrepreneur to have a chance of reaching the desired outcome with the business.  What is really difficult is getting that plan in place, and then monitoring progress and making adjustments over time.   Business valuation – establishing the worth of the business – isn’t done based on data from a single point in time, it must capture historic performance data over several years of operation.  Business value also takes into consideration whether or not there is a profitable future for the business given its current condition, based not just on historic information but on industry outlook as well as economic and competitive landscapes.

Because business value is a dynamic thing, potentially changing with any given activity or event, it is essential that the business owner monitor performance and how it impacts the value “goal”.  Too often is a business owner caught off guard, believing that things were going very well because the cash flow was good, only to find out that they have drawn too much cash out of the business to allow it to grow in a healthy manner.  If the goal of the business is to support the owner lifestyle, perhaps this is not a problem, as additional growth of the business may not be the primary goal established.  The following quote from an article on Entrepreneur.com described this type of business owner pretty well:

“I asked the owner of a small, fabulously profitable manufacturing company why he didn’t grow the business bigger and sell it for a gazillion dollars. His response: “Excuse me? You’ve had way too much schooling. What part of 30-hour work weeks and a $5 million personal income don’t you understand?”

For most small business owners, this is where the struggle becomes visible – understanding that what you do now in the business impacts what you will get from it in the future.  If the business needs the money to grow, then taking too much out will stifle that ability.  If part of the exit strategy is to build value in the business and position it for acquisition, then a growth strategy is likely a requirement.  On the other hand, if you’re getting what you want and need from the business, and growth isn’t your imperative, then it is good to know that, too, and plan accordingly (the cash cow won’t be alive forever without proper care and feeding!).

The key for every business owner is to establish the goal – the result they wish to achieve from having the business – and to then make a plan and follow it as best they can, adjusting to changing conditions and situations, but never letting the path and the goal get out of sight.

Make Sense?

J

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Not Everybody’s Accounting Online: Outsourced Bookkeeping and Accounting for “Offline” Clients

Not Everybody’s Accounting Online: Outsourced Bookkeeping and Accounting for “Offline” Clients

With all the focus on online technology, solutions that help you work smarter and not harder, and having mobile access to information at any time and from anywhere, you’d think that the entire world had adopted an entirely mobile and high-tech approach to life and business.   The popularity of software-as-a-service models and apps for just about everything are certainly a testament to the movement toward a more connected and mobile lifestyle and business environment.  However, not every business has adopted a comprehensive paperless, mobile-accessed, virtual working world – not by a long shot.  In fact, more folks than you may realize are still using actual paper, writing things by hand (things like checks and invoices), filing piles of paperwork in stand-up filing cabinets, and generally doing things the long, slow, painful way and then recording it on PC-based spreadsheets.  You know – the way we did things before the Internet showed up.

While paperless offices and technology-enabled approaches to collaborative business are gaining popularity and adopting users every day, there is a community of business users out there who are not as laser-focused on the high-tech approach to online accounting and working closer with their outsourced accountant or bookkeeper.  These business people are just getting the job done, and have found ways to handle their information and processes that work for them.  It is this business user that accounting professionals should not forget as they seek to adopt new and innovative cloud approaches to service delivery, and for a couple of reasons.  First, this type of client is likely to be in need of process support and additional service as the business grows, and the accounting professional is in a great position to help with those needs.  Second, this type of client exists in great number.

Consider the following scenario; a discussion I discovered when perusing a small business forum recently.  The interesting thing is that this is a discussion I see pretty frequently with small business owners and entrepreneurs – the discussion about the value of actual accounting or bookkeeping solutions versus a simple spreadsheet approach to record keeping.

I am the owner of a brand new small business. It has only been up and running for a short time. My accountant is pressuring me to use the online version of QuickBooks, but I am doubtful as to whether this is the right software for me.

I know that QuickBooks has a lot of different features, but I really only need it to track spending and customer payments, and since it’s still early on, I don’t have a lot of either. I would only need the very basics, and would probably only check it every two weeks at most.  The fees they want for the software would add up pretty quickly for something I’m not really going to use much.  My business is very small (just me) and service-based (tour guide), without much potential for repeat customers. I don’t need the payroll, invoicing, or other advanced features.

I honestly think that the easiest thing for me would be some sort of spreadsheet or really basic software that I could put directly on my computer instead of accessing online.

The truth of the matter is that spreadsheets often provide the common ground between small business owners and their accountants.  For a business owner, spreadsheets offer a simple and intuitive way to organize and record information because the column layout makes it easy to understand where to enter which data.  For the accountant, a spreadsheet can fairly quickly be sorted, filtered and prepared as accounting or tax return data.  While working with clients in a fully online, collaborative model may be the “best case scenario” in terms of delivering high levels of service in the most efficient manner, understanding how best to work with those clients in other scenarios is also necessary.  Getting the spreadsheet from this type of client is generally not terribly difficult – they are often more than willing to email it.  As long as the professional has a good document management solution to capture and manage these files, and introduce them into the firm workflow, then working with this type of offline client doesn’t have to be a huge impact to internal firm efficiency.

For accounting and bookkeeping professionals working with small business owners around the country, this type of client likely fits into the “normal” category more than those with a strong motivation to use cloud computing and having a great desire to use the Internet and connected services for everything they can (eventually the “new”normal?).  I believe the reality is that only a small fraction of smaller companies – solo, soho, and small/medium business – are actively managing the majority of their business process and information online.  In fact, Intuit (makers of QuickBooks) and other entry-level accounting and bookkeeping solution providers continue to heavily target small business users who are still tracking their finances using spreadsheets and other methods.  This simplified and after-the-fact approach to spreadsheet record keeping is being further facilitated by the banks and credit card companies providing customers with a greater ability to classify and categorize transaction information, and then quickly download it into said spreadsheet.

Yes, the dichotomy is clear: many small business owners resist (or are, at least, unimpressed with) cloud accounting approaches, yet these very same individuals are likely utilizing cloud services from banks and other financial institutions to support their spreadsheet and checkbook record keeping, as well as accessing email and other services via the web for various reasons.  It makes some sense, though, when you look at it from the business owner perspective.  Their way sounds easier, is less overwhelming, and meets the need – for now.

J

Learn more about Working Online With Clients: How to leverage the internet and cloud computing to work closer with your clients

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

Read more about Data Warriors: Accountants in the Cloud

Read more about using the cloud to extend “connectedness” beyond traditional boundaries

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Simultaneous Syncing Sinks Solution: Extend Access but Control Integrations

Simultaneous Syncing Sinks Solution: Extend Access but Control Integrations

Accounts and ProAdvisors: Make sure you “enable” only those who need it

In this wonderfully interconnected world of hosted and online applications and the integrations which complement them, it is important to not let the excitement of connectivity and collaboration replace reasonable control.  While there is much conversation on this topic when it involves file sharing and similar services, the discussion of data synchronization and data integration doesn’t often come up.  However, it has been my experience that there is usually a misunderstanding in how, exactly, a particular sync or integration should be applied and who should have access to the functionality when it is deployed as an extension of the QuickBooks desktop financial software.

An example of the problem might be seen when QuickBooks desktop editions are set to integrate or sync data with a web-based solution such as Method Integration or Santrio Open for Business Order Bridge.  Solutions like these, which extend the functionality of QuickBooks through extending access and integrating data, rely upon QuickBooks integration functionality move data between their solutions and the QuickBooks database.  These solutions are quite beneficial for businesses because they can affordably deliver support for various business functions via a true web application and incorporate QuickBooks data in those application views.  Additionally, this type of solution is able to push information from the web application to QuickBooks, allowing for complete integration of financial and other relevant data.

While having this type of integrated service is beneficial, there are a lot of businesses who don’t fully understand how to appropriately implement the solution and end up creating a great deal of difficulty for themselves.  One of the most frequent failures I have seen when implementing this type of solution is where the customer doesn’t really understand who should or should not have the integration.

When a web-based solution exchanges data or syncs with QuickBooks, a path is created to communicate between the two systems – the web solution and the QuickBooks application and data file.  This path must be open, and both sides of the communication identified, in order for data to sync.  The most important thing to remember is that there should be only one controlling entity on each side handling the integration.   What this means for QuickBooks users is that only one installation – one PC accessing QuickBooks – should be configured to facilitate the primary integration with the QuickBooks company file.

To illustrate, consider an implementation of Method Integration and QuickBooks that was done for a business some time ago.  This business used Method-based applications for a variety of business functions, and those applications used data sync’d from QuickBooks desktop.  Just after implementation, it was discovered that system sync’s were not happening as they should, and sometimes when they went to sync data, it would take a huge amount of time (which was not supposed to be normal behavior).  In short, the system proved to be problematic and, at times, unusable.  But the problem didn’t have anything to do with the Method Integration system, nor the technology.

The problem was that all workstations in the office were set up to sync data between QuickBooks and Method.  QuickBooks was installed on all the PC’s, even though most of the users did not use QuickBooks (they used the Method Integration system to do their jobs), and each PC had the Method Integration sync engine installed and set up to run.  This caused the system to be frequently overloaded with sync requests and caused QuickBooks to behave erratically or crash.  In addition, users who did not need (and should not have had) access to QuickBooks financial information were starting up QuickBooks and opening the company file every day because they thought it was required to allow them to access or use QuickBooks data in the Method Integration system.

The benefits of using web applications which can connect to and integrate data with QuickBooks is that a business can give users functionality and data access required to get the job done, but not expose those users to more software or data than they need.  In most cases, if not all, QuickBooks is not necessary for users of the web application (saving you the cost of purchasing and installing QuickBooks for these users).  Further, to ensure proper functionality and to remove any possible conflict or confusion in the sync process, only one workstation with QuickBooks should be set up to sync data to/from the web solution.  While it makes sense to have a “backup” PC setup with the ability, syncing should remain inactive on this machine unless the primary “sync machine” is out of service.  The key element to remember here is that the data coming from the web application is being added to the QuickBooks company file.  Once the data is in QuickBooks, QuickBooks users may access the data from QuickBooks and do not need the connection to the web application.

When deploying this combination of solutions with a hosting service provider, the same rules will apply.  Only users who need the sync capability require service with both QuickBooks and the integration installed.  In some cases, this may make selection of host services more affordable, as only those who need the “additional application” (being the sync solution or integration tool) require customized service, and the rest of the QuickBooks-only users need standard QuickBooks service.  *It might also be worth noting that many hosting providers do not support “persistent” connections – sync connections which continue to run even when you are not logged in), so syncing of data would only be able to occur if the primary user was logged in to QuickBooks and had the sync integration active on the host solution.

Accounting professionals, QuickBooks ProAdvisors, and small business consultants can help their clients understand the value and potential of extending QuickBooks desktop editions with connected web-based solutions.  The additional value these professionals bring to the conversation is the understanding of the need for structure and control of the data flowing into and out of the financial systems, offering their expertise to ensure that the accountability and appropriate treatment of the information exists throughout the business.

Make Sense?

J

Read more …

There’s a lot of legacy ERP out there, and it’s not going anywhere any time soon

https://coopermann.wordpress.com/2012/05/29/theres-a-lot-of-legacy-erp-out-there-and-its-not-going-anywhere-any-time-soon/

Compliance in the Cloud – their system, your responsibility

https://coopermann.wordpress.com/2012/05/23/compliance-in-the-cloud-their-system-your-responsibility/

Beyond Bookkeeping to Total Business

https://coopermann.wordpress.com/2012/05/25/beyond-bookkeeping-to-total-business/

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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