5 Signs Your Bookkeeping Is Failing You and What You Can Do About It.

  Business owners don’t really think about accounting processes.  So long as the cash is flowing, they think everything must be OK.  Unfortunately, they often don’t recognizing the signs that accounting is not running well at all.    Here are a few key indicators that should raise red flags for a business owner:   Inflated External Accounting Bills Your external accountant should not have to redo your books or be asking for a lot of invoices and receipts at tax time or year end.  If you find your external CPA firm or accountant is suddenly charging higher rates you need to take a closer look at billing details. If you find work that should have been done in advance by your bookkeeper then it is a sure sign your bookkeeper is not completing the work assigned before submitting it to the CPA. The rule of thumb is that firms requiring external reporting should pay no more than $1,000 per million dollars in revenue.  More than that and it’s an indication something is wrong in accounting.   You are getting No or Poor variance analysis and discussion on the financial results of your business by the 5th day of the month Every month, you should have a complete package providing you with a comprehensive set of financial reports plus key performance indicators and a list of expenses or revenue numbers that are outside of expectations.  If you don’t receive this information by work day 4 at the latest, you can bet that there is a lot of room for improvement here.   You see unallocated or miscellaneous transactions lined up in...

Make Money with Your Data

  Less than thirty years ago, most small and medium-sized businesses knew their customers personally and had a depth of wisdom on their customers, best and worst. The local butcher knew which cuts of meat his patrons liked best. The baker knew when people came in for their bakery items. The barber knew the preferred hair cuts and shave types of his ‘regulars’ and when to expect them to arrive for their next hair cut.Between big box stores, global manufacturing and the internet, business as we knew it has transformed. However, with that transformation has arisen new transactional data, called Big Data, to help everyone across companies understand and help their customers better than ever. And it’s not just big enterprises with sophisticated IT capabilities that benefit from Big Data. Thanks to cloud-based providers—which offer access to massive amounts of data, and the ability to analyze it, without great cost—today’s small businesses can use Big Data to better understand customers, optimize operational efficiencies and better plan for the future. Free Big Data-enabled services You’re probably already using one or more of the many cloud services offering Big Data capabilities. Google Analytics, which can help you understand where your web traffic comes from, how site users behave and optimize your site to convert visitors to customers. Twitter, Facebook and Yelp, which can provide real-time insight into customer sentiment about your brand. LinkedIn, employing specific keywords to find prospects, partners or job candidates. QuickBooks, which offers free industry-wide data analytics. Government sites, to search for census, economic, or environmental or weather data. Public databases like CrunchBase, which offers information about the...

Three 2015 Business Intelligence Trends

Three 2015 Business Intelligence Trends Last year brought along several changes within the realm of Business Intelligence. We saw mobile BI rise in popularity and Big Data investments increase among business owners, as well as a heavy focus on cloud & security. These shifts in process & technology are always evolving, and with them come new ways in which to succeed. The following are three trends that we believe 2015 has in store for Business Intelligence. 1. Heightened Data Interaction In 2014, the ways in which we were able to interact with our digital information grew with the increased usage of dashboard and BI software. This year, organizations will continue to invest in and experiment with Big Data solutions as the analytical advantages of this approach become even more crucial for success. The task of collecting and reviewing data has become much more interactive with the development of lightening fast analytical tools. It is now easier than ever for users to extract significant data to analyze or experiment with. 2.  Transformation of Data Governance According to Gartner, this year, 25% of all global companies will have some sort of data officer in place. With companies creating and collecting data, in amounts exceedingly higher than ever before, it is imperative that they explore cutting edge methods to control and govern said data. Data governance can be completely customized and implemented to ensure effective and dynamic use, all towards the goal of executing from a well-informed and resourceful perspective. 3. Blossoming Mobile Capacity With mobility clearly on the rise, there has been an increasing amount of focus on the development of...

Why Process Superiority is Important

Most business leaders and owners today have a lot of issues to deal with.  Unfortunately, we see a lot of them working in the business trying to ‘fight fires’ and deal with all these issues so much that they don’t spend enough time on a key part of any business, business process management and developing superior processes. In life, you naturally have set up some processes to make your life less stressful and allow you to focus on what’s important to you.  For instance, you most likely have your morning routine, your before bed routine, your cleaning routine and so far.  The routines are actually processes. In business, process management is just as important to allow you to make your business the best it can be.  Toyota has proven this in the automotive industry, Google in search, McDonald’s in fast food.  Process creation and management is crucial for any business and business model.   Below are our three reasons why companies and organizations today need to focus on creating and managing superior processes. #1: Industries and Business Models are changing and getting more complicated Industries are rapidly changing, from rapid growth to rapid decline.  These forces in conjunction with the disruptive technologies such as cloud computing, process automation, big data and mobile computing has only driven up the importance of companies needing to focus on business process management. The energy industry, for instance, is making a shift from a hierarchical “cathedral” fossil-based model to a decentralised, locally produced, locally consumed and sustainable model. Facing stringent competition and miniscule margins, agriculture needs to evolve from being a single link in the...

Keys to Successful Financial Planning and Analysis

After working with so many finance functions in a wide variety of industries, one common challenge they are constantly facing is how to conduct good planning and analysis that is valued by their internal customers, be it sales, IT, marketing, manufacturing or supply chain. The plethora of data, tools and techniques available to finance professionals is also overwhelming at times. Nevertheless, there are some basic ‘keys’ to FP&A that ensure that the finance professional becomes that ‘trusted advisor’ providing high quality planning and analysis to their business colleagues. Clean, high quality transactional data – make sure you have quality data coming in. One touch accounting – Data should be entered once or captured automatically Two day close or less – you need time to think and understand your numbers.  Getting bogged down in closing the books will limit that time Automated reporting – you shouldn’t be generating any financial statements in excel in this day. Ruthless prioritization of work – time is fixed for everyone.  Make sure you focus on what’s going to make you and your company succeed. Define the service levels with your partners – it will allow you to better acheive 5 based on where you fit into their process and work flows Keep your tools sharp and organized – make sure you leverage the most recent solutions from your software providers (i.e. Microsoft).  They have built in functionality that can automate previous manual tasks. Ensure everyone understands the process – this will help reduce stress and focus the discussion on what to do as opposed to what are the numbers. Ensure you understand the difference between...

Spreadsheets – Duct Tape of Accounting

From the rise of Visicalc in 1979 on the Apple, to Lotus 123 on DOS to Excel on Windows, spreadsheets have become, after the accounting system, the number one program accountants use on a daily basis (some may argue that spreadsheets are indeed the number one program.)  In fact, so many accountants rely on spreadsheets today to do to all their work that instead of the powerful enabler that gave accountants a leadership position in business today, it has become a potential handicap that will soon have them automated away by programmers and artificial intelligence. The problem we see today is that so many accountants do not understand the risks they are unknowlingly take on as well as the shortcomings spreadsheets have over other solutions.  A number of studies have shown over 80% of spreadsheets have errors, with 1% of all cells having forumula errors alone.  If you have more than 20 formulas, you now have the potential of having a material significant error. Our colleagues at SPRIG have done a great job of highlighiting the impact of errors in spreadsheets, from $6 Billion dollar loses at JP Morgan, to lawsuits to complete banking and company failures. For a profession that prides itself in being conservative, risk adverse and double checks everything, why do accountants continue to rely on 30 year old technology as their prime tool? Why do they turn to the ‘duct tape of accounting’ for all their problem solving and decision support? First is comfort level.  Spreadsheets are easy. Second is cost. The only factor you have to put in is time and a bit of logic. Third is...
This site is protected by Comment SPAM Wiper.