Tag: trusted advisor

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Virtual CFO Services and Partnering with Bookkeepers

Virtual CFO Services and Partnering with Bookkeepers

Many accounting professionals seek to become more involved with their business clients, helping to institute the controls and establish the processes which support sustainability and higher levels of business performance and value.  Acting as the Virtual CFO to the business, these professionals use historical financial information and detailed operational data to guide their clients towards stated goals.

While this move to engage clients are deeper operational levels is a worthy effort, there is often a disconnection in the supply chain for these services.  In too many cases, there is discord or a lack of understanding and trust between the CPA and the bookkeeper supporting the daily processing of the business information.

The business bookkeeper is the person “in the trenches”, getting daily information organized and processed, reconciling accounts, and generally tasked with recording transactions resulting from business activities.  Because the bookkeeper operates very closely with the business, they are perhaps in the best position to provide insight into how operational tasks and various business functions are performed and “accounted” for.  While the bookkeeper may not have the skill or experience to design change in these systems, they are a particularly powerful source of current process information and, in some cases, represent the barrier to change.

Years ago, as CPAs removed themselves from daily bookkeeping services to focus on “higher level” work, the opportunity was created for outsourced bookkeeping services to fill the gap in providing daily book and record keeping tasks for small businesses.  Small business owners in particular need help with the management of their bookkeeping and accounting, and without the availability (or affordability) of getting this service from the accounting professional, businesses turned to the bookkeepers who stepped in to fill the gap.  Yet every year, businesses turn over their bookkeeping and documentation to CPAs who simply re-create the bookkeeping in the form of “write-up”, trusting only their own work when it comes to tax and financial statement preparation.

It would seem that there would be a naturally occurring desire of CPAs to partner with professional bookkeepers in order to provide a full service capability to business clients and eliminate the need to reinvent and write-up the information, but this is often not the case and may be partly due to the reality that CPAs are trained on accounting principles while many bookkeepers are really only trained on the use of a software product.  Too often, bookkeepers gain their education primarily based on using QuickBooks software, and “speak” the language of QuickBooks rather than “accounting” resulting with a minimized view of the bookkeeper value by the CPA.

The CPA is thinking in terms of AR and AP subledgers, while QuickBooks bookkeepers think in terms of customers, invoices, and bills to pay.  While the language of QuickBooks has been designed to be meaningful to the non-accountant user, it is this very language and presentation which has made QuickBooks both a popular small business accounting solution as well as a foundational solution for an outsourced bookkeeping offering.

Working more closely with the bookkeepers, CPAs could help their clients not only achieve a more accurate and timely accounting of activities, they could also influence areas where necessary controls should be implemented, or where inefficient processes might be improved.  Providing not just information but also direction and actionable ability, these accounting professionals are now positioned more directly to provide the CFO services businesses need.

CPAs must find a way to get past their prejudices in working with business bookkeepers, and recognize that these operators “in the trenches” could be their most useful resource – and their most powerful ally – in the supply of Virtual CFO services to the client.

Make Sense?

J

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Reinventing your Business – What Happens When Systems Fail?

Reinventing your Business – What Happens When Systems Fail?

There is a lot of discussion today about how our children are growing up in a world where high technology is simply part of life and lifestyle.  I even read an article about how people are evolving because of the availability of information; evolving to the point where we no longer store and retrieve information, but store information on how to get information.  The article cited an example of someone who couldn’t recall the name of an actress in a movie they had seen, so the immediate response was to search for the answer on Google.  In the past, people relied upon memory, and found various ways to mentally associate and store information so it was able to be recalled.  Now, there’s an app for that.

Are we losing our ability to effectively store and recall information?  Are we forgetting how to do things before we had all this technology to help us?  It makes you wonder sometimes, how technology-dependent we are. We look at the ruins of past civilizations and view seemingly impossible structures, (impossible given what we know about the technology available at the time) and wonder how they came to be.  The knowledge was there at some point, but is now lost.

Is your business at risk from a similar fate?  Maybe it sounds silly, but it makes sense to at least think about it, because there are a lot of companies out there today that are not paying attention to critical issues such as knowledge management and sustainability.  Finding ways to capture business knowledge and protect it is essential in every organization, whether small business or large enterprise.

Small businesses are often centered on an owner who started the operation, and who just knows how things are done.  The primary goal in this situation is to capture that knowledge and turn it into process.   Only through this approach may a business begin to reduce its reliance upon a single individual, and this is a critical step in creating both sustainability and continuity in the business. In larger enterprises, process and structure are essential to keep the various parts and participants moving in the same general direction.

Once those processes are established, generally using technology to support or facilitate them, is that the end of the task?  Many businesses seem to believe so, and move along with the impression that they have things well in hand.  And then a major system or technology failure occurs, and folks are left standing around, unable to get their jobs done.  In the worst cases, there isn’t anyone in the business who really understands how to pull things back together or there is no longer access to electronically stored information necessary to continue operations.  How would you handle things if your systems – your computers and software and systems – were no longer available to you?

While GPS and high-tech auto-pilot systems can bring tremendous efficiencies to the process of flying, they also can give a false sense of security that encourages complacency. If something goes wrong, the auto-pilot will adjust and the computer will tell you where to go, won’t it?

Here is where technology has the ability to distract pilots–and entrepreneurs–from asking themselves if they’re both focused on and capable of solving the right problems.

http://www.inc.com/chris-mittelstaedt/business-lessons-from-air-france-447-crash.html

Each and every business must consider how they would address a severe information technology outage, and should take steps to protect and preserve business knowledge so that there is some hope of recovery from such an event.  In an article on Inc.com (Survival Skills Every Entrepreneur Needs), writer Chris Mittelstaedt makes this observation, and suggests that business owners address how they might get things done “old school”, just in case all this nifty technology fails us unexpectedly.

Make sense?

J

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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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Accounting Professionals: It’s Good To Be Sticky

You’re a professional services provider, perhaps an accountant.  Your client is a growing business, and they came to you to prepare the corporate tax return.  After several years of faithfully performing this service for your client, you send them the annual email reminding them to bring in the information to get this year’s return completed.  When they don’t respond, you call them.  And find out that the tax return was completed by another accountant this year, the accountant who took over the bookkeeping.  “But we could have done that for you, too”, you say.  But now it’s too late, and the client has a different accountant.  Consider it an opportunity lost, along with the client.

Is this something you run in to fairly frequently, losing clients to others who provide substantially the same services as you do?  It happens to the best of firms, and the secret to keeping it from happening is to be sticky – delivering the services which securely attach the client to your firm – and provide the ongoing value that your business clients can’t do without.

The first place to create stickiness is in your service offering.  One-time or annual projects (like tax returns and audits) don’t keep you in front of your client often enough for them to think of you daily, and daily (or at least frequently) is how often you want them to think of you.  As the business owner faces daily decisions, do they consider calling you for advice or insight?  If not, then you probably aren’t delivering the value, or the sticky service, which will tie your practice to the client for the long-term.   Daily bookkeeping, or helping the client keep their books in order, is a valuable service that most small businesses need.  While your firm may not be realty interested in performing or supporting the business bookkeeping, it is important to recognize that this level of work allows the firm to be more intimately involved with client business processes, providing a great deal more insight and understanding into client operations than through an annual tax interview.  By attaching your firm to the daily activities of helping to account for business activities, you elevate your position from an occasional service provider to a consultant whose advice is sought after on a regular basis.  You are now in a position to understand better what areas of business may need focus and attention, and have placed yourself as a trusted advisor who can help determine the best course of action in any given situation.

The other, critical element to being sticky is to make sure your clients know what you can do for them.  Don’t assume that each of your clients knows what service or value you can offer them (you know what happens when you assume, right?).  You have to tell them; spell it out and thoroughly communicate the variety of ways your firm can help them.  Just because you’re an accountant, you should not assume the client will ask you to help them with various business issues.  Often, a business owner will face a challenge and not know who to turn to.  Seeking out the assistance of specialty consultants is a standard approach, as is turning to IT contractors, software consultants, attorneys, or other service providers. Why not you?  Did they know you were available to help with this?  If they didn’t call you, then they probably didn’t think this was a service you provide.

Accounting professionals serving business clients must not only make their range of services known, but should also actually ask for the additional business from those clients.  Only through consistent exploration and value building, asking the client if services offered might be valuable to them and demonstrating how those services have benefitted others, will the firm begin to make the impact necessary to keep the client coming back, and coming back for more.

When the client comes back for more, you know you’re getting sticky.  That’s a good thing.

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