Accounting Software

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.

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.

Decisions, decisions. When the economy’s down, stress goes up. What better way to alleviate all that tension than endlessly examining and evaluating potential business solutions?

It’s a great way to pass the time, and gives the thinker a productive diversion from negative Wall Street and Main Street reports. “I’m not just sitting in limbo. I’m carefully considering all the options, to make the best buying decision in these tough times,” the analyst will rationalize.

Careful evaluation and in-depth investigation is healthy and responsible. Never-ending decision-making is analysis paralysis—a malady that’s cropping up more frequently as economic conditions go down.

In many ways, analysis paralysis is worse than downsizing. As Theodore Roosevelt said so eloquently, “In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”

Be incisive, then be decisive. Especially when it comes to accounting solutions, you don’t want to make the wrong decision. But doing nothing may lead to your undoing. Here are some ways to help drive effective decision-making about accounting system software in these decidedly unclear times:

1. Set an accounting system software decision deadline at the outset. Put yourself on a specific timeline, and stick with it. Don’t be arbitrary with setting the deadline. Make sure you give yourself enough time to complete a careful accounting services evaluation; just don’t set the deadline so far forward that it disappears amid all the other important issues.

2. Establish your “wish list” of accounting services. Give yourself a finite, concrete list of prospective accounting solutions at the outset. Along with a timeline, this will help define your responsibilities—and minimize the possibility of accounting software analysis paralysis.

3. Give yourself an accounting software “allowance.” As a starting point, find the “book rates” for accounting system software that you’re considering, then establish your top tolerance for pricing. For example, if you’re considering Microsoft Dynamics® GP, first get pricing from Microsoft and/or a Microsoft partner. Once you’ve figured out what you’re willing to budget, then you can start shopping for deals. And, believe, me they’re out there.

By putting some form around the accounting software search at the beginning, you can come much closer to assuring yourself of a happy ending.

As a rule, company decision-makers aim to do business with those they like and trust. The issue of trust encompasses a sense of honesty, ability to deliver on commitments, and security.

A bad economy tends to exacerbate problems in trust areas. Normally reliable companies may react fearfully, and unpredictably, in turn driving dishonesty to cover up both actual and perceived weaknesses.

Also, faltering financial strength can render companies incapable of following through on their commitments.

Companies concerned about cash flow may settle for more elementary online security protection—potentially exposing confidential client data to intruders.

How can you help create and maintain trust in these challenging times? One “bedrock” showpiece that establishes trustworthiness can be your accounting system software. Here’s why:

1. Accounting software that meets—or optimally exceeds—established norms helps reassure a prospective client that you mean business, and mean to stay in business. The fact that you’ve invested in top-drawer accounting system software makes a statement about your company being first class and committed to first-class infrastructure.

You may be wise to consider buying software more advanced than currently needed—a system to “grow into” as your company expands. So, instead of QuickBooks® or QuickBooks upgrade, de facto choices of many small businesses (and therefore not particularly noteworthy), consider such mid-market accounting solutions as Microsoft Dynamics GP or SL.

In addition to providing a highly competent infrastructure, such mid-market accounting solutions also offer multi-level security versus the more entry-level measures offered by such programs as QuickBooks.

2. Accounting software that interacts seamlessly with other applications, such as Customer Relationship Management, further makes a case for competence and accuracy. Apprising a prospect of supply chain continuity helps address many common questions from prospective clients.

3. Accounting software choice makes a strong statement to would-be clients about your overall business philosophy. If your company doesn’t cut corners in its choice of this most important of company systems, it establishes a sense that you will perform at a high level in other business dealings.

While initial investment in highly robust and scalable accounting software may be higher than that for entry-level applications its use as a business development tool—in addition to a financial tool—can make up the difference in no time at all.

Software-as-a-Service (SaaS) is gaining accounting software traction as an affordable, easily maintained, and easily upgraded web-based alternative to on-site server accounting solutions. It’s also referred to as “Cloud Computing.”

With SaaS accounting solutions, your data resides on the provider’s designated server, and it’s typically a pay-as-you-go service set up as a subscription.

Since it’s hosted, you don’t need to purchase the server. All maintenance, including regular backups, and upgrades are included—lessening internal IT needs and overhead. For these reasons, SaaS accounting services can be economically attractive, particularly to companies impacted by the economic downturn.

Plus, timely accounting software upgrades help ensure staying on top of the latest regulations and financial requirements.

Following are other key issues to investigate if considering SaaS accounting solutions:

Provider stability and track record. You don’t want your SaaS vendor going out of business with your data residing irretrievably on its server. Make sure to find out how the provider backs up its primary storage systems in the event of a catastrophic event—whether act of nature or business failure.

Security. In addition to baseline security, check out what additional layers of security are available to meet your requirements. If there’s a fit, buy just what you need—no more, no less.

Service Level Agreement (SLA). Make sure that the SLA offers adequate uptime and transaction speed provisions, as well as addressing other issues that your company considers critical. Don’t leave anything of major importance to chance. If it’s covered in the SLA, you have recourse; if not, you don’t.

Accounting services options. Build in a level of SaaS redundancy. Ask such questions as, “Do they offer a hardware option if you want it?” and, “In a pinch, how easy is it for you to get your information?” Ask these questions even if they’re covered in the SLA, then compare answers to make sure they line up. If not, find out why.

Ability to customize. Traditionally, SaaS accounting solutions have been more suited to out-of-the-box than highly customized applications. That is changing as the industry evolves. Confirm that the level of customization you need is currently offered, and determine what additional levels are being developed.

Scalability. As your business grows, how robust will the SaaS accounting services be? Can the hosted application support adequate numbers of concurrent users? What options exist for backup in the event it cannot?

SaaS accounting solutions are growing rapidly, and merit serious consideration—as long as they’re keeping up with your needs now, and as you grow.

As Dorothy discovered in the Wizard of Oz, who’s behind the curtain doesn’t necessarily match up with all the grand displays and promises.

This is particularly poignant as we watch such behemoths as CitiGroup trim 50,000-plus jobs from the roster.

When vetting new and improved accounting solutions, make sure the company you’re looking at can sustain itself and its products for the long-haul. Otherwise, you could wind up buying the world’s best accounting software—only to discover later that ongoing support, upgrades and advances have stopped dead in their tracks.

Given current economic volatility, who can you trust long-term to provide both the best accounting solutions and sustainability? Following are some ways to help answer “here today, here tomorrow” questions:

1. Look at company presence as a future predictor. Bluntly put, Microsoft is unlikely to go out of business—even under the worst of circumstances. It’s ubiquitous and has myriad resources to shore up problem areas. Not to put too fine a point on it, but Bill Gates alone has financial wherewithal to solve many of Microsoft’s future financial challenges. Even though he’s stepped away from a day-to-day role, don’t for a minute believe he would let the company he built get torn down.

Microsoft’s staying power is unusual. Look at any company’s accounting software in a similar light, and determine just how much of an economic storm they can withstand—before your accounting software starts suffering.

And don’t figure that past power is necessarily an indicator of the future. As proof, I need say no more than the words, “Big 3 automakers.”

2. See how “bad” bad is. Ask for at least three “negative” recent accounting software references and follow up on them. No, that’s not a typo. All accounting solutions have their detractors and vulnerabilities. By requesting three sources who aren’t happy, you can get a baseline of present drawbacks to view in light of potential future problems. If the accounting system software is fundamentally failing now, don’t expect a magical positive change in the near-term—especially with a faltering economy.

As part of this process, also research blogposts and other online articles/reviews—remembering to view comments with a grain of salt until/unless you can establish their veracity.

3. Look harder at core competencies. For example, accounting software that has “made its bones” in the manufacturing industry before branching out may decide to go back to its roots if the economic going gets too tough. If its roots are in manufacturing, and you’re a manufacturer, this can be a big plus. If you’re a retailer, you may want to locate accounting software rooted strongly in your industry.

Do your homework to help make sure your accounting software wizard can deliver on promises for tomorrow, as well as today.