professional accounting – Page 2 – Cooper Mann Consulting

March 18, 2013

Philosophy of Process Improvement: Today’s CFO Focusing on Operations

There are a great many methodologies and approaches to “making businesses better” through process improvement. From SixSigma to Continuous Process Improvement to Total Quality Management – all describe methods of measuring performance and outcomes to return intelligence oriented towards improvement. Many of these approaches are generally applied in manufacturing businesses, because in manufacturing it’s easier to see where processes may be flawed because the process works with tangible elements. Making corrections in a process can improve the performance of that process by reducing errors or increasing efficiency. The truth of the matter is that every business is like a manufacturing business, and applying measurements to the various processes the business performs can reveal the secrets to improving not only process performance and product quality, but resultant profitability.

A recent article on CFO.com titled Operations Take Center Stage, author David McCann discusses how some CFOs are improving business profitability and performance by delving deeper into operational areas of the business, and not remaining focused squarely on accounting and finance issues.

“Operations is the key to everything,” says Larry Litowitz, finance chief at SECNAP Network Security, a secure Internet-services provider. “That orientation is found most at manufacturers, but it should be at every company.”

Fiscal and financial matters are important to every business, but focusing on accounting for the end-result of business activities assumes that the work leading to the result is useful and effective. As more attention is paid to conservation of cash, reduction of expenses, and overall profit improvement, CFOs are necessarily moving deeper into the operational aspects of the business to uncover potential not previously addressed. In some cases, the move is more a function of self-defense and necessity than desire, as businesses increasingly compress spending on management, merging the functional roles of CIO, COO and CFO.

Increasingly, CFOs may find themselves taking on operational tasks whether they want to or not. At larger companies, the steady waning of the chief operating officer position has resulted in more operational responsibility for CFOs, recruiters say. In 2000, 47% of the 669 companies included in either the Fortune 500 or S&P 500 had COOs; in 2012, only 35% did, according to executive-recruiting firm Crist Kolder’s 2012 “Volatility Report of America’s Leading Companies.”

Some accounting professionals may believe that they don’t have the skills and experience to suggest changes in operational areas of their client businesses. I would suggest that logic and reason are generally the prevailing factors supporting process improvement – reasoning that is often developed through simple observation. Taking the time to understand what the business is doing at each level, and then actually observing those activities and accounting for their effectiveness and error rate, is how professionals can spend quality time in the business and uncover hidden profit potential.

Litowitz says CFOs can influence operations at a range of companies, including service-oriented businesses. “It’s really no different. The work is a set of activities,” he insists… “All these activities can be analyzed, controlled, and measured against a predetermined standard,” says Litowitz. And just as on a manufacturing floor, efficiency generates profit, justifying the CFO’s involvement.

Make Sense?

Joanie Mann Bunny Feet J

Read more about how Global CFOs are Returning to Fundamentals

March 7, 2013

Global CFOs returning to fundamentals

Accounting professionals in the United States have recognized for some time the value of offering what many refer to as “high level” services to their clients. For the accounting professional and the client business, consulting regarding strategy and growth represented value for both parties – guidance for the business client and profitable service for the accountant. However, as the economy began to decline and businesses tightened their belts, accounting professionals around the world recognized the opportunity and the need to return to focusing more on client operations and not simply on strategy and growth.

A recent article on CFO.com discusses the results of a survey performed by the ACCA (the Association of Chartered Certified Accountants), discussing how accounting professionals around the world are adjusting their approaches to accounting – adjustments at least partially fueled by global economic difficulties.

“There has been a little bit of a shift following the economic crisis. Pre-crisis there was a lot more focus around growth,” says Lyon. As the recession hit, Lyon says, global CFOs began to immediately question “What’s my cash position from day to day? What’s happening to my costs? What’s happening with my controls?”

Such anxieties may have triggered a shift back to the basics. “The CFO is a key adviser to the strategic (decision makers); that’s not in question. But there is a balance to be had in these times. That balance is around cost management and certainly managing risks,” says Lyon. “Finance as a function has been slightly brought back into focus.”

I would suggest that shifts in the approaches by accounting professionals are (at least in part) due to the various impacts of economy, technology, and globalization. There have always been different types of accounting professionals, with some focusing on management issues and others on strategy. Today’s accounting professionals must find a way to find a balance while addressing holistically the needs of the business client. This belief is also in line with the findings of the survey:

The complete finance professional 2013 summarises our thinking on why businesses need finance skills and capabilities across the entire finance value chain. We also recognise that this new environment requires finance professionals to bring a much broader range of finance skills to the table. The challenges faced by finance functions in supporting businesses are not constrained to a particular accounting or finance discipline. To strive to become world class, finance functions must excel in a broad range of capabilities, from supporting businesses to manage risk, developing effective strategies for growth, driving financial insight, continuing to maintain appropriate levels of control across the organisation as well as ensuring its statutory and regulatory responsibilities are met.

There are a lot of US accounting professionals out there who once approached their clients with a “holistic” service offering, focusing both ON and IN the business. Today, competitive pressures are driving professionals to re-engage with their clients in deeper operational roles, combining cost and cash management with guidance on growth and sustainability. It’s kind of like going back to the good old days of the full-service accounting office, and that’s a good thing for businesses.

Make Sense?

Joanie Mann Bunny Feet J

January 14, 2013October 28, 2015

Re-defining the role of the accountant, or going back to the good old days?

I grew up in a small town in Oregon where my parents ran a “business accounting office”. Many of the businesses in and around town were my dad’s clients, and we all got to know each other pretty well. Dad, you see, wasn’t simply the accountant, and the people working for him weren’t just bookkeepers. Dad was the business advisor, purchasing negotiator, collections agent, and anything else the client needed that he could provide. He fought for lower worker’s compensation insurance rates, got better prices on truck tires, and in general helped his clients with just about every aspect of running their businesses, including getting more customers and managing growth.

I had always believed that this approach, a consultative approach where the professional was intimately familiar with the business and proactively worked from inside the organization, was what all accounting professionals did. This proved to not necessarily be the case. Over the years, I have found that many accounting professionals focus primarily on the historic reporting of activities in the business, rather than actively helping to improve client business operations and performance on a daily basis.

According to one source, describing the differences between a CFO and an accountant: “CFOs are focused on working inside the business helping it generate wealth – ensuring proper capitalization, fostering the right banking relationships, addressing compliance issues – focusing on the company as a whole. Often CPAs tend to be more focused on specific tasks. Is the year-end audit done? Is the tax return done? …While both are vital to a business, a distinction we see is that the CPA’s dominant focus is historical – looking back to prepare tax returns and financial statements. The CFO, though, needs to be a forward-looking, integral part of the management team”.

It has become a reality that many accounting professionals are somewhat disconnected from their clients, a result perhaps of removing themselves from daily bookkeeping and other tasks. Recognizing the disconnect, many firms are now taking steps towards rebuilding those intimate client relationships by offering services which address more operational and strategic aspects of the business. These firms are offering “CFO Services” to their clients in addition to the standard offerings of financial statement and tax preparation. They have recognized the need become closer to the client business, delving deeper into the intricacies of the operation in order to find areas where improvements may be made and necessary controls instituted.

Accounting professionals seeking to increase the value of the services offered to clients should give strong consideration to what the client recognizes as valuable. Historic reporting is necessary, but finding ways to fund budgets, controlling expenses, helping to guide cash investments and taking steps to improve profitability are how a consultative accounting professional delivers real value to the client, building up the basis for long-lived and mutually beneficial business relationships like the ones my father once built.

Make Sense?

Joanie Mann Bunny Feet J

Small Business Owner to Accountant: Make Accounting Valuable to ME

January 10, 2013

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

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

December 13, 2012March 26, 2019

Small Business Owner to Accountant: Make Accounting Valuable to ME

Accounting services should be useful to a business owner, providing valuable insight into the business performance and activity. Accounting professionals believe their services have value, but find it difficult to express that value when selling their services to prospective clients.

The problem is that most professional accounting firms believe that what they sell is accounting: accounting services, tax preparation, audits, etc. While this may be the essential list of functions they perform on behalf of business clients, accounting, per se, is not what the professional should be selling – at least, not if they want business owners to buy.

You see, accounting is dumb and boring – a necessary evil of doing business for most business owners. Accounting is what happens to paperwork at the end of the month. Business owners don’t want to know about accounting. They want to be able to sleep at night. Business owners want to be able to know what they need to do to keep the business moving along. They don’t want to have to check the bank account balance every morning. Business owners simply want to know what they need to do to get the results they’re looking to achieve.

Accounting professionals – don’t talk to your clients about how great your accounting is, or about debits and credits. They don’t know and don’t want to know. Good accounting is expected from you; it isn’t a selling feature. Talk to your clients about the picture the data paints about their business, and about how you can help them to meet their needs and help them achieve their goals. That’s a value proposition that says something.

Make Sense?

Joanie Mann Bunny Feet J

*Note: this short article is the result of a recent conversation with my good friend and a consummate professional, Penny Breslin of MoneyPenny LLC. Penny and I both work with a lot of accounting professionals and the “song remains the same” no matter where we look. Accounting pros continue to be challenged in communicating the value of their services to business clients, and it’s all because they continue to talk about accounting (thinking anyone cares). Go figure.

November 26, 2012November 26, 2012

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.

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

Philosophy of Process Improvement: Today’s CFO Focusing on Operations

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Global CFOs returning to fundamentals

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Re-defining the role of the accountant, or going back to the good old days?

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

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

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