CFO, Accountant, Bookkeeper, ERP, Enterprise Resource Planning, Month End

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.

CFO, Accountant, Bookkeeper, Month End, Accounting, ERP, Enterprise Resource Planning

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.

 

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ERP, Enterprise Resource Planning, Enterprise, Resource, Planning, Production, Manufacturing, Systems

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.”

ERP, Enterprise Resource Planning, Enterprise, Resource, Planning, Production, Manufacturing, Systems

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 LinkedInTwitter & Facebook to keep up with the latest insights in Cloud Accounting.

Enterprise Resource Planning, ERP, Computers, Systems,

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.

Book Review: The Remedy

IMG_20170214_0916078

The Remedy

There are few business concepts which are applicable across any company in any industry. From solopreneurs to multi-national conglomerates, the principles of Lean Management are a tool to improve the culture of a company.

I recently got the chance to read “The Remedy” by Pascal Dennis, which is a real life story about how lean was applied across a large car manufacturer.

Lean is predominantly known to be a process to decrease waste within manufacturing processes. Through the travels of Tom and his sensei Andy, stories are told on how Lean Management is applied within non-manufacturing settings.  The reader is taken through a journey where common obstacles of dealing with a company that is heavily placed into silos, non-communitive, and insular culture are dealt with. You get the opportunity to see how Lean Management can be applied in the non-manufacturing departments of Human Resources, Marketing, Product Development, and Accounting.

The reader is introduced to many of the basic concepts and terminology of Lean Management (for example the 8 types of waste) in the style where Tom, the plant manager of the shining star of Taylor Motors, is taken from his current role to lead the development and launch of a new car, originally known as the Defiant.

If you want to learn more about Lean Management, this would be an ‘average’ book to pick up. The Japanese terminology is used throughout the book which can make things confusing at time. There are great animations throughout the book, but at times, too many. It gave the feeling that you were reading a Pictionary book at times.

I personally don’t see this book as being a good starting point if you are a novice to Lean Management. Lean is best learnt within a manufacturing setting since the subject matter can be visibly seen. The author previously wrote “Andy & Me” which details the journey of transforming a manufacturing plant towards being Lean. This book would be a good starting point.

Do you have any books about Lean and Lean Management that you recommend?

Have an awesome week.

Kevin

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 the South Edmonton Business Association, the Fringe Festival, Goodwill Industries of Alberta and donates blood at the Canadian Blood Services.

United, Airlines, Airports, Viral

Volunteering at United

The newest corporate public relations blunder now belongs to United Continental Airlines (United). I am sure that Pepsi is very happy to pass the hat onto another corporate citizen.

What Happened

It is ‘commonly known’, in some circles, that airlines will oversell their flights to ensure that they are full at time of departure. United follows the same practice. This practice came to a head for a flight from Chicago to Louisville on April 10th. United staff asked for 4 people to voluntarily give up their seats to accommodate the airline. 3 people volunteered while the 4th person was violently removed from their seat. From a memo off the desk of the CEO of United, Oscar Munoz, the person was ‘re-accommodated’.

Airlines commonly overbook their flights, for multiple reasons. According to the US Department of Transportation, in 2016, less than 1 in 10,000 were involuntarily bumped from the major US airlines. In 2016, this happened to United passengers at a rate of 0.43 per 10,000. It happened on American Airlines at a rate of 0.64 and at Southwest Airlines to 0.99 persons per 10,000.

Why Did It Happen

Overbooking happens for a number of reasons. None, however, can explain the events that occurred.

Resource Allocation: A flight leaving from Louisville had 4 members of its flight crew in Chicago. This is a reason why 4 seats were required. Did United not have any flight crews in Louisville that they could have used? Are their flight crews centrally located in certain locations or based off flight schedule and needs? Overall, did the schedule of the flight crews have then in the correct place?

Leadership: The CEO of United, Oscar Munoz, sent out a memo to staff after the event blaming the passenger for actions which is not seen in any of the footage that was captured. The CEO mention in the memo that the passenger was violent and belligerent. A properly written memo could have helped the situation but instead, gas was poured on the fire. If an employee of mine treats a customer that way, I would take ownership of the situation right away. It can be assumed that staff were not properly trained. That is a responsibility of the CEO. I understand that it was Chicago Airport Police that removed the person but United staff should have been trained on various methods to help get passengers to volunterily give up their seat. I have seen it happen effectively.

KPIs: United is a publicly traded company. Shareholders are constantly looking at the numbers to see how their investment is performing. Revenue per Available Seat and Passenger Miles Flown are key indicators on the health of an airline. Why does this create overbooking? If there is no passenger in the seat, the miles flown per passenger are negatively affected. When travelling, I have waited more than once for a fellow passenger to board the place. By overbooking, airlines are ensuring that there is a person in every seat.

Sensitivity: Consumers are rarely loyal to a certain airline. They will change airlines to save $5. If you don’t have any loyalty to an airline or are constantly purchasing the cheapest flight possible, you are increasing your chance of getting bumped out of your seat.

Legality: Airlines are allowed to overbook their flights and they are also ALLOWED to remove someone from a plane. In the purchasing contracts of Canadian airlines, however, it does not state how a person could be removed from the plane. Based on this assumption, the acts which happened on United are allowed and legal.

Internet Reaction

As you can imagine, the reaction from the Internet, specifically Twitter, was very fast. Videos of the event were online hours after the event occurred. It is possible that videos were posted even before the plane departed Chicago.

Social Media, Reaction, United, Overbooked

Some reaction from Twitter in regards to the United flight.

Stock Market Reaction

Shareholders of United firstly saw the event in a positive light by bidding up the price of the stock. When reading the headlines, the focus was most probably on the fact that United was overbooking their flights. A great problem for business is to have too many customers. As I am writing this the day after the event, United’s stock price has already decreased by 4%.

Overbooking, United

United’s Stock increase after word of event spread

Operating in the airline industry is not an easy task. There is a high capital investment along with the fact that one of your largest costs, jet fuel and airport fees, are largely controlled by third parties. Overbooking of flights is not something that will stop in the near future. Airlines have lost their sensitivity to consumer demands and views…mostly because consumers have trained them to be that way.  Even after dragging a bleeding and paying customer off one of their planes, United is still flying today and will for some time.

Did you know that airlines commonly overbook their flights? If you were a CEO of airlines, would you look at stopping the overbooking of flights? How would you do it so your financials are not compromised?

Kevin

Kevin MacDonald is a Business Consultant at L6S Business Consulting (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 the South Edmonton Business Assocation, the Fringe Festival, Goodwill Industries of Alberta and donates blood at the Canadian Blood Services.

How Are You Competing – Operational Excellence

excellenceThis is part 1 of 4 blogs which will cover the different customer value propositions that a company can use to compete in the market place.

Every company competes, in one way or another. Either they are competing to get attention with a gorilla marketing strategy or to simply get new customers. Competition is a fundamental part of any marketplace. Unless there is a monopoly or duopoly in place, market forces are moving resources between companies.

The weakest of all modes for competition in business is operational excellence. In the eyes of the consumer, you offer the cheapest product of all solution providers within your space. Your business model is based on maximizing your capacity and selling as much of your product as possible.

There is one Fortune 500 sized company that comes top of mind when you think about a company that is operationally excellent….Walmart. Walmart, in the eyes of the consumer, is the cheap place to go, in general, when you need to buy something. They are not very innovative in their offering. Customer service, well, you have to be able to find someone on their store floor to consider customer service. Lastly, quality products is not something that rings with Walmart.

When you create your company with a business model of being operational excellent, you are more than likely to attract a large portion of consumers. Who doesn’t want to save money?

But in following this model, it becomes hard for your company to raise prices. You have to ensure that you stay top of mind for your consumer when it comes to buying something cheap. But what happens when someone else decreases their prices below yours? Well, if you are tried and true to your strategy, you will decrease your price too. This will only start a race to the bottom. In reflection, you have just commoditized your offering and your consumer will always go to the cheapest name, no matter who it is.

There are some circumstances where being the cheapest in the market is the best position. You may be focused upon an economically sensitive target group which is under served. Perhaps you are entering a new market with a new product and you want to help accelerate adaptation of your offering.

Does your company want to be the cheapest in its industry? What companies do you see fitting that bill?

Have an awesome and productive week.

Kevin

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 the South Edmonton Business Association, the Fringe Festival, Goodwill Industries of Alberta and donates at the Canadian Blood Services.

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867. You can also follow Kevin on Twitter at @L6SBC or Facebook.com/L6SBC

Marketing In a Weak Economy

This article was originally published on the BusinessLink’s website.

Small Business Week (Oct 16-22) is an exciting time for entrepreneurs with great events across Canada offering small business owners multiple opportunities to learn and connect. One of the many events that I attended was organized by Business Link named “Ignite Small Business Week YEG: Marketing in this Economy!?”

The highlight of the event was to hear Randy Brososky from the Group of Rogues speak about how companies should market themselves during a period of weaker economic growth. I have heard Randy speak before and I knew that he would bring great knowledge to business owners to help them grow their business.

SOLVE A PROBLEM

When you are looking to market your company and its offering, remember: “To a fish, the universe is water.” In terms of your company, you truthfully have to look at yourself from the viewpoint of your customer. What problem(s) are you solving? Are you making the purchasing process logical or emotional? Are you tying these items together to make it easier for your customer to choose you?

WHAT ARE YOU REALLY SELLING?

Rolls-Royce is well known for selling cars but they also make jet engines. They understand from the view point of their end customer- the more time that a jet can be in the air, the more money airlines make. With that in mind, Rolls-Royce does not ‘sell’ a jet engine; they sell time in the air. They repair their engines for free. The only time that Rolls-Royce charge for their engines is when that engine is flying in the air.

FIVE TIPS FOR MARKETING IN A SLOW ECONOMY

Here’s what marketing guru Randy Brososky shared at the event:

1. CUSTOMER CONNECTION: Stay in touch with your customer but don’t sell to them. By keeping that connection open, when the economy starts to swing upwards, your customer will remember you and go to you first.

2. SHIFT HAPPENS: People shift their spending habits as times change, but are you shifting along with them? 10 years ago, Tim Horton’s coffee could only be bought within their locations. With the shift to home brewing and Keurig cups, Tim Horton’s coffee can now be purchased in grocery stores (or in their locations) in grounded bean format or within Keurig cups.

3. SMART DISCOUNTS: Offer 2 for 1 deals but the deal is only activated after you have involved your customer. For your customer to get a 2 for 1 deal, have them bring a friend. You can also have your customers become brand ambassadors. Offer them discounts when they speak to their community about you.

4. BEAT THE FEAR: Ask your customer what is holding them back from purchasing from you. Hyundai accepted vehicle returns if their customers lost their job during the recession of 2008. They gained market share and saw positive sales growth while other car manufacturers were going bankrupt.

5 NEW VALUE OFFERING: Look at how you can make your customer feel like the centre of the universe. Can you offer a lower cost item to your customer but still solve their problem and fulfill the same emotional desire? Can you sell what you are offering in a different fashion?

Even with a slower economy, companies still do want to increase their top line. At the very least, you can set yourself up for success during the upcoming growth phase by staying in touch with your customer, talking about the value you create, and tapping into your customers’ emotion.

Have an awesome and productive week.

Kevin

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 the South Edmonton Business Association, the Fringe Festival, and Goodwill Industries of Alberta and donates blood at the Canadian Blood Services.

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867. You can also follow Kevin on Twitter at @L6SBC or Facebook.com/L6SBC

 

Getting Back At It.

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Well, reality has set in again. I love helping my clients improve their business and solve their problems, but I will admit, touring around Washington and Oregon was fun. To make it even better, you can’t complain about watching your favourite hockey team play six games on the road too.

Putting yourself back into the loop, no matter if you are self-employed or an employee is not an easy thing to do. Before I jump on an airplane thinking about the beach, I personally do a few things to help me out:

Where I Am: I either type up an email or write down on where I am on current projects. It helps to decrease the amount of review time that I need when I return.

Make a To-Do List: I remind myself of different things I need or would like to get done when I get back. This list may include the next step in my projects to help me even more.

No Meetings: I try to avoid scheduling meetings during my first or second day back. I have found that I was the least prepared for those meetings.

When I get back, I like to:

Reconnect: I send out an email or call colleagues or clients to learn of any new developments while I was away.

Email Responding: I only respond to pressing emails when I get back to work. I tend to sporadically check my emails while I am away. I deal with pressing emails when I get back but others can sit for a day or two.

Stay Focused: I keep myself on task using the road map I laid out before leaving for my trip. The goal is to not dream about the vacation. That was in the past…the future is waiting just ahead.

What do you do to help with easing back to work after being away? Any tricks you want to share?

Have an awesome week.

Kevin

Photo Credit: John Patrick Robichaud