Tag: workflow

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Accounting Professionals: Is Your Value Tied Up in The Accounting Software?

Accounting Professionals: Is Your Value Tied Up in The Accounting Software?

Subtitle: when all you have is a hammer…

There was a time, not so many years ago, when it made sense for an accounting firm to take the position that all clients must use the firm’s preferred accounting software product or they would not be clients.  For these firms, the concept of standardizing transaction entry and data processing across the client base made sense, and provided a means to create maximum efficiency in handling the bookkeeping and accounting processes.  Typically, firms handling small business clients would select Intuit QuickBooks for client use, and offered QuickBooks training, QuickBooks transaction processing, and use of QuickBooks add-ons to support the model.  With Intuit QuickBooks “owning” the small business market for accounting software, it made sense for accounting professionals to leverage the popularity of the solution to the benefit of the practice.

As cloud-based solutions and online application services have emerged (including QuickBooks Online Edition and Intuit Partner Platform – IPP – integrations), many accounting professionals have simply continued with the philosophy of applying QuickBooks (the hammer) to every client engagement.  These firms focus on the software as a basis for delivering what they believe is value in the engagement.  In short, these professionals focus their value in the use of the product (licensing, installation, training and support), and in their data entry skills (efficiency in entering and reviewing transactions in the product), rather than in the greater value of business intelligence, insight and actionable advice.

The new challenge facing many professionals – the reality of the current market – is that there are myriad solutions and approaches available to address client bookkeeping and process needs which work really well, and it is not always a good idea to try to turn a client using one of them into a “nail” just so you can hit it with your favorite hammer – QuickBooks.   With Freshbooks, Wave Accounting, Xero and other solutions which handle various business accounting or bookkeeping requirements quite well and for an attractive price, small business owners are more frequently electing to implement applications outside of the QuickBooks product line even as their accounting professionals are continuing to promote QuickBooks for everyone.  The reason business owners are electing to use these other tools is simple: they work for them.

In reality, this issue has existed in some form for a very long time, and was perceived to be primarily in markets where technology adoption and use is low for various reasons.  The truth is that a lot of small business owners find ways to accommodate their information management and record keeping needs, and they use whatever approach works for them and what they want to accomplish.  Sometimes the approach involves Internet solutions and online applications, and sometimes it does not (Excel spreadsheets with stapled piles of receipts are still quite popular and in widespread use by SMBs and Entrepreneurs).  When that small business elects to engage the help of an accounting professional, the last thing they want to be told is that they have to make a big change to how they get things done.  It’s fine for the accountant to provide guidelines for when information will be made available to support getting the accounting work processed, but it is not necessarily okay to dictate immediate changes in software and systems supporting the business daily operations.  In a lot of cases, the accounting professional simply has no real basis for the requirement to change, other than to support their own efficiency (which is the wrong basis for making a client change their systems).   It’s that silly cost-benefit thing. If it costs the client a lot (change always = cost), and the client does not perceive or experience an expected benefit, then it makes no sense for them to make the change.

Consider a professional accounting firm in Los Angeles, California.  This firm serves small businesses, and has a pretty significant market available to sell to.  LA is a market where technology adoption is high and broadband Internet is cheap and reliable, so this firm has elected to use a product-based focus (e.g., the QuickBooks approach) in qualifying clients and crafting engagements.  Clients must conform to the solution set and the workflow in order to participate with the firm.

Now, consider a professional accounting firm in Elkton, Oregon.  This firm serves just about every business in town (population 195) as well as businesses from a few nearby towns.  Broadband Internet service is sketchy at times, and provider options are few.  This rural area of Oregon is not known for being particularly “high tech”, and computers and software and online application services are not among the things many of these business owners focus on or even care about.  The accounting firm serving this market is not focused on what accounting solution the client uses (or not), and they aren’t pushing to have all their clients purchase and install the same accounting software so that the firm’s processes can be more efficient.  Interestingly enough, this firm is likely doing better work and probably developed a closer and more intimate relationship with their client than those who have fully “standardized” the client base.  The reason is that the firm, whether out of necessity or out of desire, recognizes that each of their clients may have unique needs, and it is up to the firm alone to create maximum efficiency in meeting them.  Further, delivering personal service and useful insight instead of simply providing the work product has allowed the professional to more fully reveal their value to the client.

The truth of the small business accounting market is that there are more businesses like those in Elkton than in LA. Accounting professionals should consider whether they are in a position to “filter” their client opportunities based on use of certain software products and online solutions, or if they will accept that business clients come in all sizes and shapes – with various needs and wants and self-developed methods of getting things done – and that the firm is willing to embrace them as they are and work with them.

Make Sense?

J

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Being Proactive, Not Reactive – Accountants Need to Increase the Speed of Service Delivery

Being Proactive, Not Reactive – Accountants Need to Increase the Speed of Service Delivery

infoTechnology models are changing dramatically, with cloud services and mobile computing being the focus of the IT community and the customers they serve, and those technology changes are driving equally dramatic changes in how businesses and the accounting professionals who support them work together.

As the cloud enables an “anytime, anywhere” model for access to business applications and information, it is also driving accounting professionals to embrace those solutions in order to meet the demands of the business client  who wants their information anytime, anywhere… accurate and up-to-date.  For most accounting professionals, this means being more proactive in working with the client rather than taking the traditionally reactive, after-the-fact approach to providing service.  More frequently, accounting professionals will be judged by their prospective (and current) clients as to their ability to meet the demands of these savvy clients who know that having accurate real time information is critical to managing a business.

Cash management is one of the biggest challenges for a business owner, and this is an area where the accountant or bookkeeper is an essential player, making sure that bank accounts are reconciled frequently and reporting accurately on outstanding receivables and payables.  Business owners need to know where they stand financially, yet many accounting professionals only provide reconciliation and reporting at period ends.  The result is often a client who watches the bank balance and works from that, not realizing that there were outstanding checks or undeposited funds waiting to clear.  Clearly, this owner is not working from current and accurate information, and they will eventually realize it if they haven’t already.

The cloud is increasing the speed of business at all levels, and accounting professionals must also increase their speed of service delivery in order to retain relevance in the changing market.  While there will be hold-outs and businesses that elect to take the more traditional approaches, those clients will start to become fewer and the opportunities they represent more limited in scope.

For a little while, accounting professionals may rely upon traditional approaches to client service delivery, and continue with their position as the last person to know what’s going on in the client business.  But only for a little while.

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