Closing the Books – It Doesn’t Have to be Difficult

Below, please find a blog posting from a referral partner of L6S Business Consulting, Josh Szakal of Black River Technologies.

As a CFO, Accountant, Bookkeeper, or even someone who works alongside one of these individuals, you probably know that closing the books can be a daunting task. An added stress is if need to consolidate the books from multiple entities, and the only way to do so is by exporting your data from QuickBooks or some other legacy software package into Excel.

As a CFO, Accountant, Bookkeeper, or even someone who works alongside one of these individuals, you probably know that closing the books can be a daunting task.

If your organization is in this situation, know that you are not alone. In January and February of this year, during year-end for many organizations, Sage Intacct conducted a study to see how organizations like yours were handling closing their books. It was found that many companies simply dreaded the process, indicating that pulling everything together to get a clear picture was a tedious and drawn out ordeal. After the study, we published a free eBook detailing the results.

Perhaps one of the most telling quotes we heard was from a Hospitality Company that regularly deals with a 100 (that’s right, 100) hour close:

“Our year end is like a jigsaw puzzle. Once you’ve got everything assembled you can see the big picture, but until then it can be a jumble of random pieces of information. We run two seasonal businesses – a ski resort and a campground/day-use operation. Both entities have multiple revenue streams… in fact, they feel like 10 mini businesses in each entity.”

One interesting point that was uncovered was that many of the organizations that struggle with their month and year-end closes are running entry level software packages like QuickBooks, or legacy on-premises systems such as Dynamics GP.

The organizations that seemed to breeze through their closings and consolidations were running sophisticated cloud software packages. Take Mike Dolence of Pride Investment Partners as an example. He states:

“Intacct has drastically reduced the amount of time it has taken for us to close our statements — from several days to just a few hours. Additionally, the multi-book functionality has helped us in adding year-ending tax and audit adjustments thru a separate ledger, keeping our business books independent of our tax books. Through the reporting, we also are able to quickly bridge adjustments to our general partners, thus reducing the amount of time allocated to the year end review.”

Furthermore, we found that CFOs that were using the right financial software were making the shift from being just the company historian to being a proactive, data driven CFO, having access to real-time financial data to make informed business decisions.

All of the study results can be found in this free eBook called Closing the Books Barometer. In the barometer you’ll find our survey methodology, the vertical market breakdown, the number of entities being run by vertical market, and many thought provoking comments from both respondents and industry leaders. The barometer also provides links to other online helpful resources that can help your firm become more efficient with your month/year end closing and consolidation process.

 

Making the Switch – Historian to Futurist

Below, please find a blog posting from a referral partner of L6S Business Consulting, Josh Szakal of Black River Technologies.

I have had the opportunity to attend various tradeshows and events as a member of the Black River Technologies team over the past few years. Time after time, I never cease to be surprised by the number of organizations that are still ‘chugging along’ with either an entry level software package like QuickBooks, or outdated on-premise solutions provided by Microsoft or Sage. The biggest issue I see with these organizations that have decided to remain with their legacy software, is that they have simply accepted the fact that their standard P&L and Balance Sheet are the only reports they will ever have to analyze their financial data.

Looking at historical data found on these standard reports is important, but by the time you have completed the preparatory work to produce these statements, the data is often stale and outdated. Recent research has indicated that many firms with multiple entities are undertaking laborious consolidation processes, usually outside their financial system, which not only takes too long to complete, but is also error prone.

Those organizations that have moved to best-in-class software are making the shift from being historians, documenting what has happened in the recent past, to owning their operations and driving what happens in the future. A prime example of a company that made this shift is Trian Partners, a multi-billion dollar asset management firm located in New York.

Their controller, Len Weedman states, “Closing the books to me is an official term that we accountants like to use to describe the month/quarter-end process. But, if you are making sure your entries are booked every day (e.g. cash is reconciled, revenue and known expenses are accrued) you could argue that your books are closed every day. This allows you to have continuous, consolidated reports that are always live.”

Intacct is an award winning ERP solution for various industries.

Trian made the switch to Intacct Cloud ERP and is utilizing powerful dashboard functionality to monitor important metrics such as Cash-on-Cash, Assets Under Management, Internal Rate of Return, Fair Market & Net Asset Values, and much more. Doing so has enabled them to analyze live data at any point during the month, compare it to historical data, and then make informed investment decisions.

Other Intacct users are ‘singing similar praises’. Linda Yates, CFO of Investa Services says “Intacct dashboards and reports allow executive management immediate access to updated cash information. Also, the consolidation features are amazing”

Check out this short video (2.5 minutes) to see how other Intacct users are:

• Designing unique industry specific reports for deep analysis
• Honing in on their business’s strengths & weaknesses
• Slicing & dicing data producing meaningful ‘what-if’ scenarios/analyses

If you are interested in learning more about how your organization can benefit from advanced financial dashboard functionality and continuous consolidations, I would invite you to call us any time.

Also, be sure to check out our blog as well as follow us on LinkedIn, Twitter & Facebook to keep up with the latest insights in Cloud Accounting.

Best-in-Class vs ERP Suite

Below, please find a blog posting from a referral partner of L6S Business Consulting, Josh Szakal of Black River Technologies.

The age old decision between choosing a Best-in-Class software solution vs an All-in-One Suite package is a heated topic that should be at the forefront of your mind when selecting a software solution.

Before making the decision, you first need to understand what the key differences are. The aim of a traditional suite software package is to provide businesses with one stop shopping for all their software needs. In the world of ERP software, suite vendors provide solutions that handle everything from financial management, and point-of-sale, to CRM.

The benefit of moving forward with a suite software package is that all of your data is located in one place, and integration between applications is handled by one developer. On the flip-side, the biggest downside to suite packages is that they are usually ‘a mile wide and an inch deep’. You may take comfort in the fact that you have an all-in-one solution that handles your entire business, but might soon find that the functionality you really wanted is seriously lacking. Restricting yourself to a suite software package restricts you the R&D efforts of its software developer, which is likely spread over a wide range of products, instead of focusing on one specific area that makes them best-in-class.

A Best-In-Class software solution on the other hand strives to be the best in one area of significance and focuses all of its efforts in this one area. Choosing a best-in-class approach allows you to choose the best solution for each part of your business, enabling you to get the most out of software automation. Using Intacct as an example, financial management is the #1 priority of software development. The solution provides greater functionality and flexibility with respect to your finance and reporting needs, and offers integration to other software systems where applicable. Take Salesforce.com as an example. This software is the leader in providing CRM solutions to its customers, and seamlessly integrates with the Intacct Quote-to-Cash process, allowing the experts to focus on their respective areas of functionality where they each do extremely well.

We at Black River Technologies believe that a best-in-class approach is the direction your organization needs to take to truly excel in your business processes. This is the approach that is going to allow you the freedom to make the right decisions with respect to software automation at each stage in your business’s growth cycle.

Want to learn more about what best-in-class ERP software has in store for your organization? Click here to learn how to elevate your ERP experience!

ERP – Who needs it anyway?

Below, please find a blog posting from a referral partner of L6S Business Consulting, Josh Szakal of Black River Technologies.

You might remember the days when you first started your company. It was an exciting time for you as a new business owner as you were about to embark on a journey full of new opportunities. You probably even remember issuing your first invoice, which was likely generated from an accounting system (like QuickBooks or Simply Accounting) you purchased from your local office supply store. That system has served you well over the years, as it was inexpensive to buy, easy to use, and offered the basic functionality that was able to get your business off the ground.

Now that your business has matured, you might be noticing some of the limitations of QuickBooks (or whatever entry level software you are using), such as inflexible processes, data accessibility issues, inadequate security, and primitive reporting. You might even be trying to offset some of those limitations by utilizing spreadsheets to handle some of your advanced transaction processing, and then circling back to your accounting package to input a summarized entry.

As reported by TechValidate, a marketing content automation tool which uses satisfied customers’ data to create content, the following are the Top 5 Limitations of QuickBooks:

1. Over-Reliance on Spreadsheets to Support Financial Processes and Reporting
2. Excess Manual Data Entry and Re-Entry
3. Limited Access to Reports and Information to Drive Decision-Making
4. Difficulty in Adapting to New Business Requirements
5. Inadequate Controls Around Financial Processes

If you are experiencing even one of the above limitations, it’s probably time for you to start thinking about upgrading to an ERP system.

So what is an ERP system?

ERP stands for Enterprise Resource Planning, and is generally a business process management software that allows an organization to use a system of integrated applications to administer the business and automate back office functions.
The early editions of ERP software made their appearance in the early 80’s, and were for the most part, due to cost, only appealing to larger companies. But as ERP packages started to evolve through the 90’s, it made increasingly more sense for organizations in the mid-market, and even companies at the top end of the small business market, to implement a solution that allowed them to streamline their business operations. Today, there are an abundance of ERP systems on the market with varying costs and functionality. To identify which system is right for you requires a lot of due diligence, and many organizations opt to outsource this work as it can be a fairly time consuming task.

How do I know I need ERP software?

The first step in undertaking an ERP software search is to make sure you can see the signs that it’s time to make the move. In addition to identifying that you are experiencing one of the top 5 limitations listed above, you may also find that it’s taking longer for you to provide a certain level of service to your customers, you are noticing the need to be able to access your data outside of the office, and collaboration amongst your team is becoming increasingly more difficult and/or time consuming.

These are the tell-tale signs that it’s time for your organization to invest in a software package that is going to help foster your growth, not hinder it. You may not realize it now, but your entry level software may actually be costing you money. To help you understand the consequences of ‘standing pat’, we’ve put together a whitepaper called ‘Life After QuickBooks.’ It discusses many of the topics outlined above, as well as how to understand the new wave of financial management software. Interested in reading more? Click here to download the whitepaper.

What to Write.

I have been blogging for about a year now, mostly on topics or events within the business world. A common question I get is “Where do you find your subject matter?” As with anyone else, I was nervous about starting a blog. If you want to be successful in blogging (you can define success as you wish), you do need to be consistently posting to your blog. That made me even more nervous because I was aiming to blog on a weekly basis, but where would I get 52 topics every year?

Actually, it isn’t that hard to find topics to blog about.

Reading: I follow a few people on Twitter and WordPress who write interesting blogs. Sometimes, I write my own blog expanding on their subject matter, maybe putting a twist on it, or actually looking at the subject matter from a totally different angle. The same can go for articles. I am constantly reading different articles from business publications to keep my knowledge fresh and up to date.

Asked: I have had a number of people ask me to research and write about certain topics that I have an understanding about. These blogs are pretty fulfilling for myself since I am helping to solve a burning problem that someone within my network has in front of them.

Observation: I love to watch what is going on around me. Things could be playing out with a client or watching an event unfold in the media is always interesting. In either case, I find myself learning one or two things at that time. I might get my curiosity perked up on a certain subject matter that pushes me to do some added research. These blogs are ‘fun’ because I commonly find something out that I didn’t expect. In any case, these blogs involve more ‘thinking’ than the other types of blogs because I am commonly bring something to light from a totally different angle than anyone else.

Do you have a blog? What is your inspiration? Is there anything that is a burning question from you?

In case anyone is wondering, I came up with the idea for this particular blog while doing a training ride for my MS Leduc to Camrose Bike Tour ride. Blog ideas come up when you least expect it.

Have an awesome week.

Kevin

Picture Source: Owen W Brown from Flickr Common Creative

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.