Tag: data automation

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Accounting Professional Value is Insight and Advice, Not Just a Hosted Server

Accounting Professional Value is Insight and Advice, Not Just a Hosted Server

Back in the late 90’s, when the application service provider model was first established, a number of providers recognized how beneficial it would be for public accountants to use hosted applications to work more closely with their accounting and bookkeeping clients.  Seeking markets which would rapidly adopt a hosted application model, these providers focused on hosting small business accounting solutions such as Intuit QuickBooks desktop products, and then sought participation by the largest addressable communities of users working with those products – QuickBooks ProAdvisors, bookkeepers and accountants.  The idea was that the community of QuickBooks professionals would benefit by bringing their clients onto the hosting platform, and service providers could sell to one professional and gain a bunch of small business users.  It made sense, too, as it allowed the professional to have a single service and login that allowed them to access all their client QuickBooks company files.  The client could log in to the system, too, delivering remote access and managed service benefits to the client, as well.  But there was a catch, and it didn’t fully reveal itself until recently as cloud-based applications and true SaaS applications began to gain market adoption.

The problem actually started to reveal itself as more businesses elected to adopt hosting services.  There’s a saying amongst the QuickBooks hosting providers that “nobody uses just QuickBooks”.  Saying “nobody” uses just QuickBooks is a bit of a stretch, but the reality is that numerous businesses use other applications and software solutions in addition to their QuickBooks product.  Sometimes these products integrate with QuickBooks and sometimes they don’t, but it is not often that a business utilizes just the one software solution.  At minimum, there are likely email or productivity tools in use, too.  The point is that the QuickBooks hosting providers – those hosts focusing on providing service to QuickBooks accountants and small business clients – realized that the number and variety of applications desired by their customers would grow very quickly, as would the variety of needed implementation models.  The unfortunate solution of the time was to just put it all on the same environment.

The original selling message to the QuickBooks consultant and accountant markets was that they should get all their clients on to the hosting service, and then the accountant could benefit from an “economy of scale”, making the cost of the overall delivery lower.  Further, by grouping the firm and the clients into a single hosting environment, it would make application and data sharing easier.  Both of these messages are true, but putting the firm and its clients into a single environment – with the firm as the “sponsor” and front line promoter of the service – began to have impacts which were not clearly foreseen.

  1. Accounting professionals and consultants changed the nature of their relationship with the client, going from trusted advisors to technology and solution vendors.
  2. Client business technology needs were placed as secondary to “enabling” the working relationship between the accountant and the small business client.
  3. Attempts to fully satisfy client technology requirements overburdened and impacted the environment, reducing overall service quality and satisfaction and diminishing the value of the scale economy (as well as the clients’ perception of their accounting professional).
  4. Firms structured their processes to support a single technology and operating model, and found difficulties in adopting new strategies or solutions.

In concept, having accounting professionals and their clients all working seamlessly together in the same systems sounds great.  For some firms, a cloud server packed with all the firm and client applications and data enables an entirely new business and service model, which is very cool and it actually works (for some firms and their clients).  But the problem – a problem which may not be fully revealed in the short term – is that the various businesses involved, from the accounting practice to each and every client, has different business needs and operates as a unique organization.  While there may be fundamental similarities, “the devil is in the details” as they say, and a single platform or hosting solution is unlikely to really work well for all.  Even more potentially damaging, the perception of the trusted advisor who is now viewed as a vendor of IT services or software erodes the value of the client engagement and the potential for the firm to deliver greater benefit through their core offerings.  A business owner is more likely to change vendors of IT service than they are their trusted accounting or finance professional.   And they’re also more likely to change IT service providers if the provider cannot deliver exactly the application or service desired.  When the accounting professional is perceived to be the IT service provider, the lines are blurred and the client ends up attaching their loyalty to a software product or business solution instead of the accountant advisor OR the IT provider.

With SaaS and native web-based applications being broadly adopted by small businesses, the opportunity for firms to engage with clients in different ways and with different solutions started to break the one-size-fits-all hosting approach.  Professionals found that empowering their clients by supporting properly fitted solutions which work for the client business delivered the opportunity to become more operationally and strategically involved with the client business.  Deeper operational and strategic involvement with the client became the means to drive increased value in the engagement and services offered and delivered.  The client business was able to benefit from the involvement of their trusted advisor, regardless of what platforms or systems might be in place.

Accountants and bookkeepers are recognizing that the previous model of aligning the practice with a particular software product or delivery system may not be the best approach to building and retaining the customer base.  With new business accounting and bookkeeping solutions emerging regularly – and gaining broad market adoption – and as more and more varied cloud based services and solutions are applied to various business problems – professionals will further recognize that their value is not tied to a cloud server, a single small business accounting solution, or to any particular technology.  The value of the accounting professional is not in the software they support or the server it runs on.  The value of the accounting professional is in the insight gathered and advice provided – services offered which help support better business management, growth and profitability.

Make Sense?

J

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Cloud Computing and Online Accounting for All? Some Markets Are Still Waiting for Broadband

Cloud Computing and Online Accounting for All? Some Markets Are Still Waiting on Broadband

As the information technology industry espouses the benefits of the “paradigm shift” in computing and the move to cloud computing platforms and models, there are folks out there in the world who just aren’t seeing it happen like that.  Not everybody’s working online. For many, the Internet and online working models simply haven’t intruded into their lives and businesses as it has for others.  While this may be partially rooted in conservative mentalities and beliefs which are resistant to change, the more likely reality is that options for high-quality and affordable broadband service is simply not available to them.  Without choices for affordable and useful connectivity to the Internet, online just doesn’t have the attraction it does for those who are “connected”.

When businesses look at cloud solutions and the Internet dependency that comes along with them, having more than one connection to the outside world becomes the imperative rather than a luxury.  Unfortunately, some markets are still waiting for broadband (or have very limited options for service), rendering the cloud nearly unreachable.

It may come as a surprise to some, particularly to those in East and West coastal regions, that high speed broadband just isn’t as available in other zones.  In fact, the *National Broadband Map clearly reveals limited availability and choice in numerous regions of the US.  Broadband Internet access is a necessity to support the IT industry’s shift from localized IT to “cloud” IT.  But the shift is only evident to those who are involved in it or who have that option.  For those who the industry is beginning to refer to as the technology “have-nots”, this lack of available and affordable access will ultimately create more than simply an inability to participate in broadband-reliant IT solutions.  The fast pace of innovation and evolution in IT almost guarantees that the technology have-nots will fall even further behind, possibly to the point of not being able to catch up.

 “A Growing Gap Between IT Haves, Have-Nots. There will be a growing gap between the IT haves and have-nots in 2013. The latter will fall behind the former on a wide range of business technology fronts such as mobile, cloud, social, virtualization, and analytics…” 7 SMB Technology Predictions for 2013 | InformationWeek.com

As business (and personal) technology models continue to evolve, and as new solutions and services begin to displace the old, those who remain disconnected will begin to directly experience much more impact.

Consider something as simple as using QuickBooks desktop software for small business bookkeeping.  As Intuit continues to remove elements from the installed software product, turning them into web services instead, customers with limited or no broadband access will find themselves without the features and functionality they need in the software.  And the only possibly comparable alternatives to QuickBooks desktop accounting products are Internet-based alternatives, making them not really alternative options at all.

It is also likely that lack of sufficient broadband is one of the factors motivating many solution providers to seek clients in other markets – outside of the United States, and in regions where broadband availability is more prevalent and service speed and quality is higher.  Yes, it’s true.  The United States is not the leader in broadband availability, or even in quality.

“For many people, their broadband connections are their lifelines. So what is the state of broadband in the U.S.? Well, when it comes to speed and price and adoption, we’re certainly not a leader — “middling” is a better way to describe our position.

Currently 119 million people that live in the U.S. don’t have broadband connections (for many reasons, including not wanting it or not being able to afford it) while 19 million don’t even have the option to get it. Our rate of broadband adoption (62 percent) lags behind countries such as South Korea, the U.K.,and Germany, according this year’s Federal Communication Commission report. (We’re closer to the penetration rates to Japan, Finland, and Canada.) These numbers are not likely to change soon, given that broadband growth is slowing and providers are moving away from wireline infrastructure. “ GIGAOM:The state of broadband in the U.S. [infographic]

Accountants and other professional service providers serving clients in regions lacking sufficient choices for access must recognize that their approaches to doing business will not necessarily match their peers in more fully connected areas.  Certainly, accounting and legal professionals are dealing with this reality as practice coaches and industry leaders push for IT- and cloud-enabled models for improving practice performance and creating differentiation, even as their proven applications and business solutions morph into or are replaced with SaaS applications and online service.

The take away from this is that there are still large numbers of businesses and individuals doing things with legacy tools, managing spreadsheets on standalone PCs, or writing with pens and using paper – even in areas where broadband access is plentiful.  Regardless of how forward moving the rest of the world may be there remains a need to provide service and support these IT have-nots.  Perhaps this becomes a means for differentiation, finding ways to work with businesses who are connected and those who are not, and leveraging the firm’s access and capability to deliver what the client cannot obtain directly.

Make Sense?

J

*The National Broadband Map is a tool to search, analyze and map broadband availability across the United States

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Client Solutions, not just Professional Services

Client Solutions, not just Professional Services

Accounting Professionals serving a small business client base are struggling to find ways to demonstrate the value of the services they provide, yet many firms remain focused exclusively on their own processes and improving profitability therein rather than looking “outside the box” to see how they might involve the client in the discovery.  The obvious element which these firms are not addressing is the client user, and how a direct participation by the client becomes the foundation for internal process improvement.  After all, a lot of what accounting professionals are battling against is perceived value.  If the client were to be a more direct participant, the value of the work and the tools which support getting it done could provide a more tangible or visible aspect and increase the overall value perception of the client.

It is easy to say “get the client more involved”, but actually doing it can be the real challenge.  Professionals are recognizing this reality as they attempt to engage client users in online portals for document exchange and by providing application functionality which is supportive of the accountants’ processes.  While some professional firms are experiencing success with this approach, many other firms are not.  There are likely a variety of reasons why some firms have more success than others in getting clients to work with their online tools, but I believe there are two key elements which impact success:  accountant-centric focus, and provider lock-in.  Whether these elements work to the firms’ advantage or not depends solely upon the specifics of the service model and client market being served.

Accountant-centric focus

Most accounting professionals recognize that paperless approaches to working with client information and documents makes a lot more sense than working with the actual paper.  Particularly with the innovations in image capture, OCR and zero-entry solutions, it is logical to try to get as much of the required information transformed into useful digital data as possible.  Data entry time is reduced, accuracy is improved, and the resultant information is better and more useful and may be processed more efficiently… for the accounting professional.  For the client, on the other hand, it’s just another way to get information to the accountant (who is always wanting more information).  The value of the deliverable – the reconciled bank account, financial report, tax return or whatever – isn’t increased.   The solution often offered to the client is a solution intended to solve not the client problems, but the accountant’s.  For the client, it is difficult to see this as a “solution” to any evident problem they face.

Provider lock-in

Business software customers are often commenting about how the solutions they use don’t allow easy transition to alternative products, or add-ons are only available from developer-prescribed sources.  Vendor lock-in is a consideration and may be a barrier to doing business, because business owners want to know that they have the ability to change as business requirements change… whether it means changing software and systems, or whether it means changing professional service providers.  As more professional service providers attempt to engage their clients in technology-based approaches to doing business, clients are recognizing that these approaches may come with “strings attached”, limiting their future choices.  While it is important for the professional services firm to protect its work product, it is also important to consider the client’s position.  Part of every business relationship is trust, and that trust should not be one-sided.  Just as the professional trusts that the client will work with them in a legitimate manner, so does the client trust that their professional will not hold their information hostage if they elect to make a change or engage with other providers in the future.  Additionally, does the system provided by the accounting firm allow the client to collaborate with their own team members or other service providers, or does it address only the interactions between the accounting pro and the client?  This also represents a barrier to participation, as any given client business likely interacts with a variety of providers – many of whom are also asking that owner to implement solutions which improve their ability to do a form of e-business together.

As accounting service providers look to technology to facilitate closer and more efficient working arrangements with clients, they would do well to also consider how that technology is positioned to benefit the client as well as the professional practice.  Delivering a solution which provides clients with the capability to control information access, which allows collaboration with their various service providers, and which facilitates a lean process approach for all involved could be the right answer to the problem.  Perhaps this becomes the most important factor – client enablement – and focusing on solutions which address the clients’ information management and processing requirements as well as those of the firm.

Make Sense?

J

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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Workflow is Essential in Document Driven Business

The popularity and proliferation of online applications and cloud computing solutions for business has transformed how organizations manage activities, people and resources.  The Internet-connected marketplace has introduced both opportunity and challenge for businesses of all sizes, and much of this focus has been placed on the management and control of digital documents and data.

Electronic document management has been commonly used in professional services business for many years, yet has not always been viewed as an essential technology to apply in the context of organizing and structuring the processing of the document.  As clients of these professional firms continue to generate and utilize a great deal of paper documentation and written information, firms continue their reliance upon paper files, shared drives, and other more traditional methods of organizing the work, and storing or controlling access to documents.  However, key trends in the industry are causing these approaches to be increasingly burdensome for professional service firms, including:

  • Need to support multiple offices, geographically disbursed team members, and mobile workers and devices
  • Increasing use of email as a primary tool for collaboration
  • Introduction of new risk elements accompanying new technologies
  • Increasing numbers of forms and document types coming from clients
  • Rising expectations of clients and increased market competition
  • Growing need for businesses to increase earnings and profitability with fewer resources
  • Increasing requirement for knowledge management supporting sustainability, creating the ability to retain and reuse best practices and work produced

Advances in the design and underlying technology supporting many document management solutions today have delivered great capability to firms adopting electronic document management approaches.

Benefits of implementation include the ability to create a centralized, searchable documents base which includes all client-related content, including email communications as well as documents and data files. Easy search, access, collaboration, and re-use of information are enabled, and complete audit trails may be retained. Electronic document solutions also reduce physical document storage needs, reducing costs associated with managing and storing paper files, and can better serve business disaster recovery and continuity initiatives.

While today’s electronic document management solutions may address many of the challenges involved in working with large volumes and varieties of documents and data, there are few solutions on the market which address fundamental issues relating to document processing workflows and how they are impacted by various business or data-driven events, or by the availability of people or resources to facilitate the process.

The growing problem facing businesses today is the volume and variety of information which must be organized, processed and archived. The market is sold on the idea that electronic communications and record keeping will simplify things, but the reality is proving otherwise. Businesses are hoarding information at unprecedented rates and with the ability to collect and generate increasing volumes of digital data, businesses have not simplified their information processing, they have only created a greater need.

Generating and collecting data is not the issue created, nor is ultimately the archival and storage of the information. Rather, the problem created is in organizing the work related to processing this ever-increasing volume of documents and data.

Businesses dealing with documents and transaction-based activities should not only attempt to structure workflows necessary to support the various processes, but must also seek to normalize as much as possible, developing a consistent and methodical approach to the work which results in predictable and consistently high quality service delivery.

The efficiency gained through this structuring and standardization of the work allows the professional services firm to achieve a greater level of profitability for outsourced processing engagements, which are often viewed as low-margin and low-profit activities.

Make Sense?

J

Read about Using Structured Workflow to Manage Offline Clients | Intuit Accountants News Central

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Using Structured Workflow to Manage Offline Clients | Intuit Accountants News Central

Using Structured Workflow to Manage Offline Clients | Intuit Accountants News Central

The demand today requires that accounting professionals be more attentive and, yes, aggressive, in terms of “attacking” a regular flow of processing client information rather than batching it at period end. This drives a great need to structure and organize the work, and workflow, so that the repetitive and regularly performed processes may be streamlined and made easier to manage on an ongoing regular basis. It is no longer good enough to wait for clients to deliver the information and request the resultant reports. We must proactively request and gather the required information for processing, especially with offline clients, in order to get the work done more frequently.

Read the entire article at Intuit Accountants News Central

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