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Here is the doorway to hundreds of articles, publications and resources that, from a professional perspective, practicing accountants will find priceless. Regardless of the area of specialization, this site offers up technical help, operational guidelines, industry information, breaking news and a toolbox of strategies to make running a business just a bit simpler.
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Year-in and year-out, small business owners take on a barrage of taxing hurdles -- literally and figuratively. To this end, responsible financial tracking might mean the difference between jubilation and jail time should the IRS pay a visit. Enter the accounting industry. People most commonly associate accountants with tax season. However, today’s version of the job entails much more than merely filing government forms. Many professionals in the field now manage public records, conduct audits, prepare and verify financial papers, provide budget analysis, perform investment planning, etc. With most entrepreneurs too bogged down in business basics to establish a detailed financial strategy, the role of the accountant has changed quite a bit over the decades. Firms now offer a wide range of year-round services specifically designed to keep companies’ economic pipelines flowing smoothly. As any experienced accountant knows, quality customer service represents the key to unlocking success. In the same respect, professionals in the field must oversee a slew of client files, making each a top priority. Time and Billing Programs offer financial gurus tools to better record and manage the amount of time spent on each client’s accounts. These computer applications often include features like automated invoicing, check writing, bill customization, practice management solutions and much more. Designed to increase efficiency and organization, brands like Office Tools Pro, Timeslips by Sage, ImagineTime, LexisNexis: Time Matters-Billing Matters, and Tenrox Timesheet, usually offer upgrades to cater to each firm’s in-house clerical needs. Aside from utilizing time and billing programs to oversee their own internal operations, however, a number of accountants also rely on this software to track the books of small- to medium-sized companies. Some advanced versions allow accountants to use their client’s monetary records to create a detailed business plan for that customer, forecasting income and expenses for the upcoming year. In fact, most premium time and billing programs will create diagrams and graphs that highlight the client’s quarterly finances, annual earnings by department, etc. This represents a perfect visual tool for outlining a business’s money trail. Nonetheless, to fully capitalize from the benefits of time and billing programs, users should make sure the software integrates with other commonly-used computer applications. This will help reduce the time spent on data entry. Depending on the package’s capabilities, desktop time and billing programs start at around $300. Some companies also sell similar online versions, allowing accountants and their coworkers to access a client’s records anytime, anywhere – as long as there’s Internet availability. Different Views Most brands of multiple screen monitors include a function that lets users move an application from one screen to the next simply by clicking the mouse button. In addition, many versions of these devices are compatible with both Windows and Macintosh. It’s the Most Wonderful Time of the
Year… Tax preparation suites tend to include printable templates and e-filing capabilities – a popular feature as the IRS received well over 65 million returns via the Internet last year alone. Aside from tools designed to prepare and file taxes, these programs often compile an end summery for each client, detailing the number of forms and schedules required for that particular year. Visit us next week to read about Customer Service in the Accounting Industry. Sales & Marketing [top] The U.S. Department of Labor anticipates employment in the accounting industry to climb anywhere from 16 percent to 28 percent through the year 2014. With this kind of spike in growth, competition throughout the field will only increase. As a result, clever marketing represents a vital tool for accountants looking to prosper in a crowded field. Of course, many professionals in the industry turn to the old fail-safe techniques -- a sleek brochure, colorful advertisements in a local publication, a 30-second spot on the radio or television. While these are all proven methods, today’s technology opens the doors for more original, farther-reaching marketing strategies. Drumming up Sales in Cyberspace One feature common in Web site plans is the E-mail Marketing System, which provides accounting firms with the capability to send digital newsletters and tax due date reminders. In some cases, accounting firms post monthly financial tips on their Web sites. This gives potential clients incentive to frequently return to the firm for assistance. Certain Web site plans include a function that automatically e-mails this advice to every registered visitor. These routine follow-ups help to brand the accounting firm’s name, likely making it the first place the recipient heads to if they need money management. Marketing research groups stress that trust plays a large part in drawing people to an accountant. Web sites allow professionals in the industry to start molding the foundation of that relationship. By setting up Reference Pages that discuss subjects like IRS auditing and how to address tax troubles, CPAs reach the real target market: Those in immediate need of financial guidance. Engine Optimization represents a viable way to enhance the chances those target clients arrive at one accountant’s site versus the competitors. This technique -- available with most Web design packages -- codes the site with keywords, phrases and meta-tags, leading to higher placement on search result lists. Nonetheless, online marketing is not confined merely to Web sites. Webinars represent a good way to network to multiple people at once. Accountants often use these virtual meetings to teach prospective business clients about available financial services in relation to tax requirements. The typical Webinar broadcast consists of a Power Point presentation accompanied by a speaker’s voice. Online IT companies offer various Webinar packages usually for under $1,000 a year. Some plans include unlimited Internet broadcasts to hundreds of viewers, with features like advanced e-mail invitations and reminders, attendee polling and surveys, participant satisfaction lists, real-time Q&A, etc. In With a Click Putting a Face with the Name A fair share of marketing firms offer logistical planning for such financial sessions. These services usually include invitation creation and distribution, strategic planning, copywriting services for literature, graphic design services for exhibit materials and more. Seminars help accountants teach prospective customers about the importance of good financial tracking. It allows the speaker to enlighten listeners on a subject that intimidates most – fiscal management. In addition, accounting seminars convey the importance of responsible financial tracking. Outside of setting up appointments and encouraging referrals, CPAs often use seminars to hand deliver promotional advertising products. Whether it’s a company logo displayed on a mouse pad or an accountants contact info on a desktop clock, these products represent effective marketing tools to brand the CPA’s services. Customer Service [top] In today’s global economy, businesses seem to focus more on the bottom line than they do customer service. However, when it comes time to crunch the numbers, the way a business treats its clients and patrons greatly affects its profit margin. According to a study published in Journal of Accountancy, consumers were generally unhappy with their accountant’s approach to business. The study asked participants why they left their accountant, and it revealed:
Missing from these results were price and quality. Still, a survey by the Bay Street Group, a marketing, management and strategy consulting firm, found that 47 percent of public practicing accountants think they lose clients because of price, fees, costs, budgets and affordability. According to the same survey, 79 percent of finance managers cited poor client service and a lack of attentiveness as a reason to change accountants. Other findings included: 38 percent did not feel they were getting enough time with a CPA firm’s top employees; 34 percent said they did not click with their CPA; 33 percent thought they received a lack of proactive advice; and 22 percent said they possibly wanted a new or different service not provided by their CPA. On the flip side, 22 percent of CPAs thought they would lose a client because of bad chemistry. Another 19 percent admitted they might not be proactive enough; 17 percent said they would rather drop a client first than be fired by that client; and 11 percent feared a client would start providing their own accounting services. To survive in such a competitive industry, accounting firms—especially the small ones—try to set themselves apart by specialization or proven customer service. Some are adding fixed monthly prices instead of “billable hours” to their list of options so that customers don’t end up with sticker shock when they receive the invoice. Others offer unlimited support, allowing customers to contact them at any time by phone, e-mail or in-office—all at no cost. Account Login Besides better customer service, going online often means improved efficiency, which comes from the ability to instantaneously access a client’s documents and to easily transfer information between the client and the firm. It also is a matter of cost efficiency, often netting savings related to handling paper, postage and overnight delivery charges. For clients, Internet, Web based accounting services translates into savings as well. In general, it costs less—as much as 30 percent—for a business owner to outsource bookkeeping and accounting than to provide those services in-house. Managing Customer Relationships There are a few different types of CRM programs—all of which can be used by large, medium or small firms. Most feature efficient contact communications, including e-mail synchronization, customization tools, automated processes to increase daily productivity and remote data exchange. One drawback with off-the-shelf products is a lack of technical support to fully integrate customer data from the software to devices such as a cell phone or PDA. Another CRM software option includes integration suites that can either be used alone or with other software packages. While many of these are at the higher end of the price spectrum, they often include a Web-based portal that alleviates the need for technical management of databases. Staffing & Employment [top] According to the latest census from the U.S. Department of Labor, roughly one out of every four wage and salary accountants worked for firms specializing in tax preparation, bookkeeping, payroll and accounting services. Moreover, one out of 10 accountants or auditors was self employed. As far as job outlook is concerned, government insiders predict the industry will swell with newcomers over the next several years. With many Baby Boomers nearing retirement age, the industry in all likelihood will see a number of new openings. Other factors also play into the U.S. Department of Labor’s predictions. Across the nation the number of businesses should rise, resulting in the demand for more accountants to oversee books, prepare taxes and offer financial guidance. Officials expect that this economic boost, coupled with added scrutiny of company finances, will steer the accounting market’s growth. Still, many feel professionals in the industry will face new challenges in the future. As businesses expand, and others open, the volume and complexity of cost information, expenditures and taxes will increase, according to the U.S. Department of Labor. The government agency believes changes in tax legislation, financial reporting standards, business investments, mergers and other areas will place added stress on the industry as a whole. In addition, officials note that the surge of global business has translated into a greater need for financial expertise in international trade, accounting rules, international mergers and acquisitions. Bad Business Means Good Business for
Accountants The Department of Labor notes that Congress recently approved legislation designed to slam the brakes on such fraud. The latest regulations require public companies to enact internal controls that ensure accuracy and reliability of their financial reporting. The move has sparked more work for accountants, particularly those licensed to audit. Training Today, most related programs offer master’s degrees as part of the 150 hours. Those who decide to embark on a profession in the industry must take a four-part Uniform CPA Examination. The test, which is prepared by the American Institute of Certified Public Accountants (AICPA), takes two days to complete. In the end, only about one-quarter of the students pass every section they attempt, notes the U.S. Department of Labor. Most states require those taking the test to pass at least two sections for partial credit. While the exam can be taken over a certain period of time, most states insist the CPA candidate have some accounting experience. People with valid CPA certificates also can attempt to acquire other designations such as the Accredited in Business Valuation (ABV), Certified Information Technology Professional (CITP) and Personal Financial Specialist (PFS). Professional associations in the industry often sponsor courses, seminars, group study programs, and other forms of continuing education to train potential accountants. Individuals looking to start a career in financial assistance might consider becoming a Certified Management Accountant (CMA). To obtain this designation from the Institute of Certified Management Accountants, the person must first have at least two years experience in management accounting and pass a four-part examination. This test focuses on financial statement analysis, working capital policy, capital structure, valuation issues, and risk management. In addition to taking the exam, applicants must receive a bachelor’s degree or reach a minimum score on specific graduate school entrance exams. Hiring Trend For this reason, the U.S. Department of Labor feels job applicants with a proficiency in the latest accounting and auditing software likely will see their résumés bumped to the top of the pile. In addition, those with expertise in international business, knowledge of a specific industry and understanding of current tax legislation should prevail in the job hunt. Billing & Accounts Receivable [top] Eateries should make big bucks in 2007, yet owners may continue to struggle for their piece of the pie. The National Restaurant Association predicts the American restaurant industry will rake in a whopping $537 billion this year, up at least 5 percent from 2006 revenues. But, while the boom bodes well for the nation's 935,000 restaurant and food service outlets, the irony is that cash-flow issues continue to plague the business. Even successful restaurateurs, it seems, are operating under badly-timed billing systems, with their accounts-receivable columns out of sync with accounts payable. On the upside, analysts offer some solid solutions. A generous measure of sound cash-flow management, they maintain - along with the right invoicing and accounting software - can allow business owners to collect the money owed them in time to keep operations humming. Cash flow - or fizzle? In fact, most analysts agree that a rudimentary misunderstanding of cash-flow principles ranks right along with inaccurate menu pricing, employee retention headaches and faulty accounting systems as a major issue. Restaurateurs, they say, are missing the boat. While billing practices may vary from restaurant to restaurant, basic cash-flow rules apply to every eatery in business today: Assessment. Conducting a cash flow analysis a thorough evaluation of an establishment's cash inflow and outflow - is the foundation for good management. The process includes a hard look at accounts receivable and accounts payable, among other financial components, to identify discrepancies and shortfalls. After an in-depth analysis, for example, an eatery owner may discover that December is his biggest revenue month, yet most of the bills come due in November. Timing. By planning ahead, a restaurant owner can distribute incoming revenues so that money is there when it's time to pay the bills. An example: Three parties are on the December schedule of a mid-size restaurant/catering establishment, but a huge insurance payment is slated for November. By collecting deposits prior to the December events, the proprietor can shift the cash inflow to cover monies due. By the same token, asking for extra time on vendors' accounts payable likewise can allow strapped owners to rework their cash flow patterns. Most restaurant supply establishments are open to flexible financial arrangements - as long as they know they'll get their money. Inventory. A number of experts suggest that too much income sits on shelves in the form of overstock, rather than going to cover the bills. According to one source, a standard full-service restaurant should keep only about seven days of inventory, a few less for fast food or quick-service operations. Posting. Studies show that a fair number of restaurateurs post all or most of cash inflow incorrectly, thus giving them a skewed picture of what actually is clear profit. The most universal errors are the recording of all daily credit and cash receipts as income, no adjustments for discounts or free meals and accepting gift certificates as a credit rather than debit. Posting insurance down payments and installments in the month paid, rather than prepaying the account to spread monies more equitably over a 12-month period, likewise is a pitfall. Software means dollars and 'sense'
Accounting packages. Available as individual programs or as "extras" in POS systems, functions typically include accounts receivable, purchase and sales tracking; invoicing; inventory control and food item costing. Prices vary widely, with some beginning under $90. Finally, a word of caution: Whether planning to purchase a state-of-the-art system that controls every business function, or a single product to perform billing and accounts receivable chores, new software should be compatible with existing programs. As support goes, it's better to invest a few extra dollars to insure training and backup, as opposed to flying solo - especially when problems arise. Vendor Relations & Purchasing [top] The food service industry consists of a lengthy menu of product suppliers. For restaurateurs, selecting the wrong vendor often correlates into a recipe for disaster. Before contracting with a food distributor, industry insiders recommend that owners follow a few basic steps. Doing so could mean the difference between cooking up sales and putting out fires. Savory vendor tips Order Together Many smaller to medium sized eateries might consider teaming up with other nearby restaurants to form a coop of sorts. Since distributors generally price product by bulk, it's often cheaper to buy in large amounts. Provided they use all of the food delivered, restaurants get more for their buck when they purchase in mass quantities. With a handful of dining establishments placing one large order on a single ticket, the price certainly looks to go down for all involved. Look at Capabilities Restaurants wanting more from a distributor often turn to an established national food vendor. These operations generally own facilities throughout numerous states, allowing them to handle a larger capacity of customers. In short, no order is too demanding. While small, independent distributors might offer cheaper prices due to the scope of their delivery area, they do not always provide the bonus services found at larger operations. For instance, some national vendors give their clients routine market reports and trend studies, outlining top-selling items around the industry for that time period. In other cases, these large-scale distributors provide menu and recipe services, helping their customers coordinate meal options based on the products they order. Even more important, national distributors tend to hold promotions on a regular basis. For instance, free delivery when purchasing more than $100 in food. Check Distributor's Track Record The cheapest, most dependable vendor means nothing if that company sells inferior, unsafe products. No matter the type of food distributor, restaurateurs should always research the vendor's credentials and regulatory practices. Industry specialists tell eatery owners to make sure their distributor receives supplies from licensed, established sources. It's important to find out if the workers handling the products are trained in food safety. In addition, restaurateurs should contact the appropriate health department officials to see if the distributor possesses any code violations. Restaurant owners can learn a lot about an operation simply by talking to others about their experience with that particular vendor. Some food safety experts even recommend visiting the distributor's warehouse(s) from time to time. If this however presents a problem, restaurateurs should at least know the vendor's quality assurance procedure. Paying attention to details such as the condition of delivery trucks, packaging and product presentation also might help reveal the vendor's safety practices. Purchasing Prospects Other purchasing possibilities include working with local vendors. According to the National Restaurant Association, a growing number of dining establishments are relying on locally-produced food items. This ensures freshness, cuts back on the time it takes to get products from vendor to restaurant and often reduces delivery fees. Moreover, it allows the restaurant owner and vendor to form a more personal business relationship since they're within driving distance of the other. Some industry pundits feel eatery owners should always negotiate with the vendor - particularly if they are a repeat, loyal customer. The logic is that the food loses value when it's stockpiled and aging in a distributor's facility. Restaurateurs remember: The vendor also is running against the clock in terms of selling and product expiration dates. In certain instances, eatery owners opt to hire a restaurant consultant to help with purchasing specifications. These cuisine craftsmen not only help restaurants purchase the right items for their operation, but show them how to incorporate the products into a menu that sells. In addition, consultants usually aid in meal pricing, setting up food delivery systems and portion control. Establishing efficient methods helps owners get the most out of their inventory. Accounting Insurance [top] By Mary Lou Kueffer Accounting professionals live in a world of taxes, financial figures and business analysis, often providing clients with advice on managing exposure to adverse financial events. Some industry experts suggest that many accounting firms do not practice what they preach. Like the proverbial shoemaker who works hard to make shoes for his customers, while his own children go barefoot, the accountant is not shoeless. But he could be uninsured or underinsured and vulnerable to unnecessary risk. The National Association of Insurance Commissioners recommends periodic review of risk exposure, usually once a year and/or at times of significant change. Rule of thumb:
Of the 1.3 million accountant and auditor jobs listed in the Bureau of Labor Statistics for 2006, approximately 10 percent are self-employed. Changes to financial laws and regulations under Sarbanes-Oxley created increased demand for accounting jobs. Projections are expected to grow by18 percent between the years 2006-2016. As such, the National Employment Matrix estimates that 226,000 accounting jobs will be added to the workforce over this decade. Likewise, start-up accounting practices will increase, thus sparking greater focus on vulnerability to risk. First Steps for Risk Management Planning Before a company opens its doors to the public, protections to safeguard the owner's assets should be in place. An insurance broker experienced in commercial lines can help the owner design a portfolio of insurance policies suited to his/her unique business plan. Some key policies are listed below.
What Else To Consider The above list identifies basic policies all accounting practices should include in their risk management toolkit. Industry pundits suggest other products such as key man coverage to protect the revenue stream due to loss of key employees by death or disability. Disability coverage is often overlooked. However, it is more likely that a person between the ages of 30-65 will become disabled rather than die. Buy/Sell policies, Employment Practices Liability insurance and Umbrella coverage are all unique protections that should be considered in a team effort between the owner(s), their attorney and an insurance professional. From another perspective, providing health and life insurance benefits to employees creates incentive to attract and keep good staff. According to the Insurance Information Institute, some owners may elect options to traditional insurance providers, such as self insurance and other alternative risk mechanisms. Any option an accounting professional selects requires careful consideration and expert advice from a legal and insurance perspective. Accounting Communication [top] By Mary Lou Kueffer Back in the 70's, Captain Kirk flipping his portable communicator while declaring "Beam me up Scottie" was a Star Trek sci-fi depiction of the future. Well the future is now. Spend a few hours browsing an electronics store, and you soon realize that the world has moved far beyond the vision of Alexander Graham Bell's communications network. The onset of the Internet in 1994 and WI-FI and nanotechnology a few years later changed the way accountants do business forever. These days, people shopping for an accountant expect the latest and greatest in service and support. The vast market of communication options may be confusing and the technology terms boggle the mind, but the Personal Digital Assistant (PDA) revolutionized a paper-driven practice of forms, files and functions tying an accountant to a desk and file cabinet. In a survey of small business owners published in the Telecommunications Industry News in October, 42 percent of small business owners could not function without wireless technology. Another 51 percent are more reliant on mobile phones, PDAs and PC data cards than they were two years ago, with a full 55 percent stating they will be increasing usage in the coming years. Keeping Customers In A Competitive World The highly competitive marketplace of the 21st century demands that accounting firms act in new ways. In the frantic pace of business today, creating more value for customers requires a flexible attitude to new technology, which will lead to more effective application of customer-centered tools. Technology convergence, the center of this union, refers to the synergistic combination of voice, data and video onto a single network, sharing resources and interacting with each other. Communication musts for accounting professionals include:
What's Hot On Today's Market Major manufactures of PDAs offer products that vary in size, price, performance and even in what platform they use. Accounting professionals should look for mobility gadgets that permit architecture best suited to the size and goals of their practices. The information listed below will help identify some of the products currently available. Keep in mind, this information is for purposes of example only. Dozens of leading manufacturers nationwide and abroad offer hundreds of excellent alternative products.
Don't Get What You Can't Protect Grabbing data from the air wirelessly, adapting Bluetooth technology for a hands-free environment or researching Web sites with via handheld computer is a boon to accounting professionals. However, these efficiencies come with a vulnerability to computer viruses, hackers and the capture of confidential information that could devastate a practice. Significant logical and physical safeguards need to be built into the system. Most likely, an information technology professional should be involved in the purchase of software and development of proper firewalls, virus and security programs, and training and protocols. Today, accounting professionals are continuously challenged to adapt to changing customer needs and differentiate their service offerings from the competition while balancing investments in staff and technology. The purchase of appropriate accounting software, coupled with compatible wireless communications can attain a higher level of productivity, service and profitability not possible until now. |
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