Tag: offshore bookkeeper

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Business Owners to Accountants – Tell Me in Real Time

Business Owners to Accountants – Tell Me in Real Time

Business accounting is defined as the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results.  It sounds pretty dull, and to most small business owners it is the last thing they want to think about.  “Accounting” is what happens at the end of the month, quarter or year – or when any type of taxes are due.  What matters to the small business owner is their cash flow and cash availability to meet immediate operational demands, and how they will get past today’s problems to reach their future goal of comfortable retirement, leaving a legacy for the kids, or selling the business at a high value.  It may even be that, during periodic visits to deliver the monthly paperwork to the accountant, business owners express interest in discussing their ability to meet future business goals, yet these conversations often take a back-burner to simply getting the work processed and reports and returns completed.

Accounting has traditionally been approached as an after-the-fact activity, recording transactions for things that were already done in the business.  While this may be a handy approach to getting an annual tax return completed, it really does nothing for the small business owner in terms of providing them with information to run the business. Further, it does nothing toward helping the business owner get to where they want to go with the business, reaching whatever goals they had in mind when they first got started.

Cloud solutions and Internet-based applications have emerged which provide a high level of capability and information to small business owners, much like the E*Trade tools which enabled any user to “take control of their financial futures by providing the products, tools and services they need to meet their near- and long-term investing goals”.  Where E*Trade delivered simplicity, insight, and guidance for investors in real-time, so do many of the new business analysis and financial dashboard solutions, but in a business financial context.

Individuals who are focused on meeting their financial or investment goals are very interested in monitoring their progress toward reaching those goals, and guidance often suggests that making adjustments in strategy or approach at certain points along the way may be required.  Similarly, business owners have a great interest in monitoring the progress and status of their businesses, and many are taking steps to gain that insight and obtain guidance through the use of online banking solutions and other real-time reporting tools.

By simply connecting financial systems to some of these online reporting tools, business owners are able to gain a significant level of insight into their business operations, including bank balances, cash coming in and going out, and other information which supports making daily business decisions.  Unlike a static financial statement or annual report, these dynamic tools can provide business owners with real-time information about their businesses, which is what the business owner is looking for.  But guess what?  It’s not happening like it ought to.

Business owners are becoming increasingly impatient with their accounting professionals, and are demanding higher levels of service at more competitive rates than ever.  Further, many business clients of accounting professionals are gaining a belief that the value their accountant delivers is diminishing as do-it-yourself tools are gaining in popularity due to ease of use and well-stated value propositions.  If accounting professionals would only take a proactive, rather than a reactive, approach to working with their clients, this question of value would be much less of a question.

The biggest problem facing these accounting professionals is that they rely upon the client to deliver the work.  Waiting around for clients to bring in information for processing, or traveling around to client offices to pick up materials when they say it’s ready, is creating a divide between the client and the accountant which is difficult to overcome.  This divide – the lag in time between when business things happen and when they are accounted for – eliminates any possibility for the business owner to operate with all the information they need.

Accounting professionals must become proactive in their relationships with business clients, establishing the initial groundwork for how each will perform in order to achieve the desired result – real-time information for real time decision support.  The accountant has a responsibility to not only ensure that the information is processed appropriately and accurately, but also to ensure that it is obtained and processed in a regular, timely manner.  Increasing the frequency of capturing and processing data is necessary in order to provide information when it is most useful.  This means that accountants must not only organize their workflows to adjust to the new frequency and timeframe for processing, but that they must also be far more proactive in obtaining the source information from clients on a regular and recurring basis.

It has always been a problem to get information from client businesses so that it can be processed and reported on.  Now, with the demand for more timely data and “instant insight”, business owners are expecting faster returns on the processing of accounting information even as they continue to be the bottleneck in providing the source data.  Accounting professionals and the tools they use will have to adjust to this reality, creating a stronger focus on the organization of work and turning notification and exception handling processes around so that they drive the workflow rather than simply result from it.

Make Sense?

J

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Accountants and their Clients Online: Who Owns the Data?

Accountants and Clients Working Online: who owns the data?

Mobile device support and remote access to applications and data is becoming a standard requirement for most businesses today.  The “online” working model goes a long way towards addressing problems face when they need to get team members together no matter where they are.  When the information is stored and managed centrally, it is easier to provide access to outside accountants or other professionals.  Yet, while this collaborative working model solves numerous problems, it also introduces a number of issues that neither the business owner nor their outsourced professionals may have thought about.  One of these issues is the challenge represented with dissolution of the engagement, and subsequent division of information assets related to it.  This separation can become unfriendly and problematic if the parties do not have an agreed-to plan.  Quite frequently, disagreements result from the use of subscription-based online services which are not clearly delineated as customer-controlled versus provider-controlled.  In these cases, clients may benefit from the use of a service through their provider, not understanding that the provider ultimately owns or controls access to the solution and maybe even the data associated with the account.

In general, it is safe to take the approach that whoever pays the bill for the service is the owner of the data associated with it.  This “he who pays the bill owns the data” approach is simple and it makes the most sense.  Consider that the individual paying the bill for the services is the individual who is financially obligated for what occurs with the service, so it makes sense that they would have authority over service access and usage.

It is quite common in outsourced and online accounting models for a professional firm to subscribe to services or solutions which help them support various processing needs for their clients.  Solutions such as Bill.com or Paychex provide tools to assist professionals in efficient delivery of various process-support services, such as bill payments and approvals, or payroll processing and reporting.  These tools are utilized as part of the professional service offering, and are generally not directly exposed to the client users (other than in specific contexts, perhaps).  Separating the client from these systems is usually not difficult; the professional simply stops using the solution for that ex-client.   Since the transaction information from the solution ultimately integrates into the accounting data file, the accounting firm can simply return the accounting data file to the client without losing their process support data in the online service.  On the other hand, if the client was the subscriber to the solution and the accounting professional was “invited” to participate with them, the separation would mean that the accountant no longer had access to the online data, and the client would retain use of the solution.

In contrast to a process-supporting solution, separations become far more complicated when the online solution includes fundamental tools for the client like general business application access and data storage.  Consider that a business decides to use SmartVault for its document management needs, and also wants to connect documents and files directly to transactions in their QuickBooks accounting system.  In this situation, the accounting data and the document vault are closely connected, and contain a wide variety of valuable business documents and files.  When the solutions are both run as online services, where the QuickBooks applications are hosted along with the integration for SmartVault, both the accounting professional and their business client can work more closely and in real time, creating much more value in the relationship.  If the relationship does not work out, however, separating applications and data can be a frustrating process for both parties if there isn’t a clear understanding of who gets what.  It would be easier perhaps if the question centered on an accounting data file, but in these situations the problem extends to questions of ownership of source documents, working papers, and even application software licenses.

Accounting professionals need to protect the value of the work they perform on behalf of the client, and the business owner needs to have their business information and applications.  Clearly understanding how to orient subscription based services to protect the interests of both parties is an important element in providing the highest level of professional service to clients.  In some cases it makes sense for the professional to own and control the subscription, particularly if the service is an element which supports professional services delivery.  These tools help you provide services to your clients, and the client benefits from the result of use of the solution.  If the client leaves you, then it is up to them to “tool up” their own operations to handle those processes.

In other cases, it makes far more sense for the client business to own and control their online services, and invite their outside professionals to participate. The benefits of working together are still present, and the remote access and mobility aspects benefit the business owners and team members as much as their remote professionals.  The accounting professionals can preserve their working papers and other work product on their own systems, drawing a clear line between their retained data versus that of the client and making a potential future separation much easier to facilitate.

jmbunnyfeet

Make sense?

J