December, 2008

I came across an article on a website called isnare.com that directly addresses the critical profit-generating support that accounting software provides small business.

Many entrepreneurs—especially those who don’t live and breathe accounting numbers—view accounting software as a necessary evil required for tax compilation and some degree of performance assessment.

In reality, accounting software can provide a powerful tool to boost revenues and cut expenses. Properly installed, configured and understood, accounting system software can provide the lifeblood to sustain a company through many serious scenarios in the days ahead.

Isnare.com article author Terry Cartwright addresses the challenge by noting, “Producing financial accounts may well be an administrative headache for a small business and many self employed businesses put off this essential business and reduce it to an annual event. There are major benefits that small business can derive from operating the financial system as an important part of the business management.

“Big business invests millions in sophisticated accounting software and financial control systems because financial management is seen as a key to financial success.”

The article goes on to say that one major accounting software function is to establish and evaluate gross profit margin in both percentage terms and volume compared with fixed expense levels. Accounting software used to generate a monthly profit and loss calculation will help determine immediately if gross profit is sufficient. Identifying areas where it can be improved can substantially improve profitability.

Adds Cartwright, “That is the benefit of accounting software, the production of actual financial figures that indicate where and how much action needs to be taken to improve the net profit earned. That action may indicate a need to improve sales volume, increase the gross margin through higher sales prices or lower direct costs [through] a reduction in overhead and business running costs.”

Other useful information can be generated by reviewing historical and present financial figures. Comparisons can identify such areas as sales opportunities not being fully explored, ways to improve gross profit margins, and steps that can be taken to limit excess expenditures, thereby achieving cost control.

Although not the most glamorous part of a company’s operation, accounting services undeniably rank high on the list of most important to future survival.

So, I have been writing about the importance of accounting software that can ensure compliance with accepted practices and regulations. Then, along comes Bernard Madoff, who’s allegedly able to circumvent compliance controls and implement a $50 billion Ponzi scheme.

It certainly validates the question of how effective any accounting software can be in ensuring accurate and above-board practices. Of course, it also adds fuel to the regulation fire that inevitably will heighten levels of control and reporting—and consequently the need for secure and sophisticated accounting solutions.

A Dec. 23 article in the Wall Street Journal frames the debate: “Questions about compliance practices at Bernard L. Madoff Investment Securities LLC are troubling many securities industry observers, as losses related to an alleged $50-billion Ponzi scheme associated with the firm’s investment advisor arm continue to impact a widening international circle of investors. ‘How could you have this massive scandal going on in a firm that’s adopted adequate procedures? That’s what compliance is all about,’ says James A. Fanto, a professor at Brooklyn Law School in New York and author of Broker-Dealer Law and Regulation.”

So, what are some lessons to be learned from all of this in the world of accounting solutions?

One, hire honest people. No accounting software, no matter how robust or well-configured, can function flawlessly if the people operating it—or their bosses—have crooked intentions. Just because you have excellent accounting system software doesn’t mean you’re totally protected. People still matter—a lot.

Two, the importance of adequate accounting software cannot be overstated. Notes the Wall Street Journal article, “…investigators issued a subpoena to David Friehling, a New City, N.Y., accountant who audited the Madoff firm’s financial statements, and are seeking documents related to the Madoff firm going back to Jan.1, 2000. Friehling has until Dec. 29 to fulfill the request.” Do you think for a moment that this accountant wants to be caught with his figurative “accounting software pants” down? Obviously, sophisticated, up-to-date accounting system software would aid his cause.

Three, when accounting practices and reports are challenged, how many people want to spend inordinate amounts of time trying to comply? The right accounting software can be a huge time-saver in many types of situations. In some cases, it can be a potential “livelihood-saver” as well.

In today’s cash-challenged business environment, many companies consider their current accounting software sufficient. No matter what accounting solutions are presently employed, “They’ll just have to do” is the frequent retort of company executives and managers. Let me cite three primary reasons why this may be a bad idea:

1. Companies need to score “style” as well as “substance” accounting software points. Essentially, this means being able to instill confidence in anyone examining the books as well as providing comprehensive, up-to-date data. Think about the IRS auditor conducting a tax audit. If the accounting software is robust and current, the auditor is more likely to gain confidence in the respondent’s accuracy (very important style points). Conversely, outmoded accounting software or sloppy hand entries may convey an attitude of being unwilling or unable to offer accurate records (even when this isn’t true).

2. The right accounting software can save you money from the get-go, paying for itself rapidly and becoming a virtual profit center. For example, accounting solutions that optimize handling of accounts payable can pinpoint timely payments that maximize use of that money as long as possible. If a company pays some vendors too soon to maximize interest capture, and/or pays tardily and accrues late fees and penalties, it’s easy to see where accounting software can either be costly or cost-saving.

3. Accounting software/CRM linkage can make or break the sale. Having a seamless conduit between accounting services and a customer relationship management program can help make the sale, both in terms of quality of information provided and making a good first impression (again, style points). Conversely, faulty or failed connections inevitably will lead to loss of existing customers as well as hamper acquiring new ones—particularly when a competitor has robust accounting software in place.

Get protected. Get proactive. Get new accounting software now, if you need it.

Given Microsoft’s goliath status, it’s an easy target for criticism. That’s the way of the world. As you go up the totem pole of success, critical analysis is right there alongside.

A criticism-charged business environment is why I was particularly pleased to read a blog on the zdnet.com site posted by enterprise software spokesman Dennis Howlett. He had just returned from Microsoft’s Copenhagen Convergence conference.

In part, it reads: “…customers seem happy with the company and what it is delivering. This is the third time in succession that I’ve attended Convergence and found largely happy customers…This was a modestly confident yet cautious Microsoft, happy to parade good customer stories. This is to be welcomed and a sharp contrast to other shows where the emphasis is often on ensuring the company’s message is not tempered by customer reality. As we move forward in an uncertain economy, these stories will become much more important to commenter’s and customers alike.”

As a Microsoft partner who makes a living with Microsoft Dynamics accounting software products, I paid close attention to the words “modestly confident yet cautious Microsoft.”

This is where I want my accounting solutions partners to reside. More important, it’s where customers should want their accounting software companies to operate. Companies that appear over-confident often cross the line into hubris (roughly translated as “arrogant pride”—you know, stuff like flying in your corporate jets to ask Congress for billions in bailout money).

Once this happens, the company tends to be less responsive to customer suggestions and needs, and too assured of its own rightness. Ultimately, this results in product inferiority—particularly in mission critical arenas such as accounting software.

You also don’t want a company that’s underperforming, not meeting the needs of its customers. “Modestly confident yet cautious” tells me that Microsoft is working to meet customer needs and is listening, without being presumptuous. It also shows an ongoing, omnipresent commitment toward continuous quality improvement in its accounting software applications, as well as its aligned solutions—such as CRM.

As a Microsoft Dynamics accounting software user or prospect, you hopefully will find this heartening. At a time when economic downsizing, cutbacks and shutdowns are multiplying exponentially, it appears your accounting system software is safe with Microsoft.

Though there are many similarities between Microsoft Dynamics® GP and SL accounting software, finding resources to usefully compare and contrast them can prove challenging.
In fact, Microsoft itself reinforces the somewhat muddled profile of these two mid-market accounting solutions. Its information about both solutions tends to blur the lines and distinctions………………………….Please visit our friends over at MS Dynamics World

Training and Development Magazine (T+D) just reinforced what I’ve been saying repeatedly about employee training: It’s very valuable and will become even more critical to company ability to compete in the future.

In its December 2008 issue, T+D discusses “Learning in 2020.” The article notes, “…work organizations are already finding new ways to harness our interconnectedness to make information faster, more current, more accurate, and more customizable for individual workers. This trend will expand with the rise of intelligent tutors and on demand learning technologies…Many industry experts agree that learning will be a critical part of the future of work and employee development. Workplace learning and performance professionals will still be involved in the skills training portion of the field, but they will become facilitators of learning.”

As a company involved in implementing accounting software, we are heavily invested in training. It makes no sense to buy software, install it, and then scrimp on the employee accounting software training needed to make sure people both understand and appreciate its benefits and features.

Despite what we see as a common-sense approach, stories of accounting solutions being forced on unwilling and unwitting employees run rampant. Too often, companies view accounting software training as an afterthought or a bare necessity.

Accounting software is the lifeblood of an organization. It mandates and deserves adequate training and support, so people can practice, learn and make mistakes in a non-judgmental environment.

We’re already well into the trend identified by T+D when it comes to self-directed accounting software training, and our role as learning facilitators—not just “preach and teach” professionals. Our standard protocol for Microsoft Dynamics GP and SL implementations includes a comprehensive menu of automated, self-paced training processes coupled with support customized to individual and specific company needs.

As the T+D article adds, “…training must be aligned with business goals and opportunities as determined by enterprise leadership. Its deployment will shift from the ‘tell’ mode to the ‘guide’ mode, achieved through work-based learning leveraging coaching, mentoring and facilitated group interaction.”

It’s extremely critical when implementing new accounting software that the impact on the entire workforce and company productivity be taken into account. By aligning business goals with accounting system software objectives upfront, companies can look forward to much smoother deployment. Effective, timely, supportive training is the glue that ties it all together.

As training modalities progress, look for more informal, collaborative learning environments. The T+D article explains, “More and more individuals are managing their own personal, informal learning and building their own personal learning environments…more teams or groups of people are making use of social media and Web 2.0 tools to share links and content with each other, and are participating in discussions, collaborating, and co-creating content.”

Train early. Train often. Train to stay ahead of the curve—and you’ll stay ahead of the competition.

A recent Wall Street blog post pooh-poohing Microsoft’s 0% financing for Dynamics accounting software left out one key point: Those not qualifying for 0% may still find themselves a sweet deal.

The post notes, “If free money in the middle of a credit crisis sounds too good to be true, that’s because it probably is. Only qualified customers will get 0% financing and, as a Microsoft spokeswoman tells us, ‘the guidelines are pretty stringent.’”

Even if sweet interest rates aren’t in the offing, there are still the Economic Stimulus Act incentives that effectively can reduce the purchase price by double digits.

But, here’s the most important point of all: While we all want to save money in a down economy, it’s important to get the accounting software that will serve your needs—deal or no deal.

If your buying decision for any accounting system software ultimately hinges on the type of deal you can negotiate, you’re buying it for the wrong reasons. Accounting software is too important to a company’s continued operation to be evaluated on the “sweetness of low price.”

That said, there are deals to be found on Microsoft Dynamics® GP and SL accounting software. Just like everyone else, Microsoft is trying to move product. As the WSJ blog added, “…this is just a hook to get people to consider buying software at a time when they might otherwise delay purchases.”

Before comparing prices, incentives and perks, first vet accounting software to qualify potential accounting solutions for your company’s immediate and future needs. Once you’ve identified one or more accounting solutions that can meet your needs, then—and only then—see what kind of deal you can negotiate.

Making the wrong accounting software decision inevitably will cost your company much more than any savings effected by sweet financing or other inducements. Those costs, ultimately, will make that sweet price turn sour.

Score a win-win: First and foremost, decide to buy software that will best serve your needs. Then, and only then, negotiate your best deal.