Is it Time to Upgrade?

Accounting software is a great tool for your business. It helps you keep track of invoices, let’s you see where are your money is going and even allows you to access your information basically anytime, anywhere.

But if your accounting software is out of date, it actually might be doing more harm than good for your business. Here are some signs that it might be time to look into an updated system.

  • Are you still communicating with vendors and customers through email or even *gasp* snail mail? If so, it may be time to look for a system that provides an easier way to communicate.
  • If your desk is covered in papers and you have paper invoices and timecards coming out your ears, it’s time to stop endangering the tree population and look into a system that can do this electronically.
  • It might be time to look into some new software if your system doesn’t allow you to look at your information anytime, anywhere. This includes your cell phone – many systems allow you to have all of your information at the swipe of a finger.
  • Is your chart of accounts endless? Or, maybe you need to create a whole new set of accounts each time you add another profit or cost center (grants, jobs, products lines, etc.). Either way, both are major signs that it’s time to upgrade and update.
  • Your account system should do what you need it to, without you having to perform extra steps and work arounds. If your system is doing the exact opposite of its intended purpose, it’s time for something new.
  • If your vendor has completely stopped (or won’t be for much longer) supporting your software, you’ll need to upgrade. Although this sounds pretty obvious, we see this problem quite often!
  • It’s time to upgrade to a new system if you’re still using spreadsheets to track date and compute calculations. (Hint: accounting software does this for you!)
  • Here’s a big one. Do you enter manual journal entries – maybe you’ve even compiled them in your spreadsheets? Are you operating in several systems that don’t sync together? Time to get on board with a new, updated system!
  • Consider how much time you are devoting to closing the books each month. If you’re manually creating reports and manually completing the consolidation process, you’re wasting your time. An updated system can help you save your time to dedicate to other parts of your business.

If any of these common warning signs sound like something you are experiencing, now is probably a good time to start looking for new, updated accounting software. Although the transition won’t be easy, the benefits to your business will be worth it!

Cloud Based Accounting: Is it Right for Your Business?

You may have heard a buzzword that’s been floating around a lot lately: the cloud. We’re not talking about the big white things in the sky. No, the cloud refers to a big network of servers that work together virtually to store and compute data, run processes and house information that is easily accessible no matter where you are.

The cloud is becoming a buzzword because it’s changing up the tech world. For example, remember how you could buy the Adobe Suite in a box, than you would have to install it onto your computer using the disc provided? Well, if you’ve updated Adobe in recent years, you know you now have to purchase and download it online. This switching away from a physical product and moving to an online based system is all thanks to the cloud.

Adobe isn’t the only program adopting a new way of operating. In fact, your bookkeeping and accounting software is starting to become some of the most popular cloud based systems available. Don’t believe it? Intuit found that in 2016, 64% of small businesses in the US are adapted to the cloud. In fact, the cloud is becoming so popular that by 2020, it is anticipated that 78% of businesses will be fully operating on the cloud. This 64% has nearly doubled the 37% that were cloud adapted in 2015. Our point? Cloud based systems are becoming wildly popular for business use.

With cloud based accounting becoming so popular, have you thought about moving your business away from the OnPrem systems you’re currently using and moving to the cloud? Here are some considerations to keep in mind when making this decision.

Updates | With OnPrem systems, you have to wait until the new, updated version comes out, drive to the store and buy it and then install it on your computer (which is where it would stay). When it comes to cloud based systems, updates are ready to be downloaded as soon as they become available (and in many cases, you don’t need to download anything). While some cloud based updates you have to pay for, many software subscriptions include all updates (and support)! Not to mention the updates are typically pushed out to you without lifting a finger. The cloud makes it easier to stay up to date so you can ensure your business doesn’t fall behind on the latest technology has to offer.

Accessibility | OnPrem solutions can be great, but not if you have to travel for work, or aren’t near your computer at all times. If you need to use these programs out of the office, you will need to bring your computer, use your specific server or VPN, etc. In other words, it’s inconvenient. Cloud solutions, such as Quickbooks Online, are the opposite. Because they are stored in the cloud, they are accessible virtually anywhere. Whether you’re on a mobile device or your home desktop, all it takes is logging into your account via the internet and your information is all available for you. Gone are the days of dragging your computer with you everywhere you go.

Security | In the Share the Cloud Security Spotlight Report, 21% of respondents felt there was a higher risk of security breaches in the cloud than for OnPrem programs in 2016. This was down from 28% in 2015. Although there are still thoughts of the cloud being unsafe, this trend is quickly declining. Breaches, although a scary concern, aren’t the only security issue to keep in mind. With OnPrem solutions, all of the information is housed on your computer. If your computer is stolen or damaged, you lose all of that information. In the cloud, the information is available wherever you access the program. The cloud also uses encryption to keep data safe from attacks. As with all data storing methods, security issues are real. Taking steps and putting security measures in place can help prevent your data, no matter where you store it.

Cost | Cost is always a concern, especially if you’re trying to make and maintain a profit. It’s easy to look at the cloud and say “that’s too expensive.” However, there are hidden costs that come with OnPrem solutions that you may not be considering when doing a comparison of the two. When you purchase your OnPrem solution, it’s easy to look at it as a one and done cost. However, you should keep in mind all the updates you will have to buy (and the hassle of getting them installed manually). You also should keep in mind the infrastructure involved with OnPrem solutions. You will need a computer, a server, security systems and other various IT pieces to keep the program running smoothly. The cloud has this all built in, resulting in no extra costs.

When it comes to OnPrem solutions versus cloud based accounting systems, it’s good to know your options. Having a clear vision of what’s available and how it may impact your business can help you stay on top and ready to make changes to keep your business running smoothly.

 

The Best of Class

The cloud has revolutionized the way we look at software selection for accounting software (got to love those numbers). Not so long ago, companies sourced out a system that was all-in-one (a suite). One software, trying to meet all the demands of your company.

With the help of the cloud (because integrations in the cloud are much easier), we have entered into the best of class world; “There’s an app for that!” has taken on a whole new meaning. The cloud has given us freedom to add-on functionality and automation. And most of these add-ons aren’t trying to do it all. Rather, they do one thing very well, hence the term “best of class.”

Best of class refers to being able to choose an accounting package that best fits each part of your business. Let’s say you’re using QuickBooks Online – it’s pretty basic when it comes to inventory tracking, time tracking and reporting. Plus, it’s light on customer relationship management (CRM). That’s where best of class comes in play. Within QuickBooks, you are able to go integrate an app that best fits your needs to add that functionality. You could choose Salesforce for your CRM, Unify for your inventory, T-Sheets for time tracking and/or Fathom for reporting. Each of these applications focuses on their specific uses and tries to be the best in class.

*Note: We are not promoting any of these programs, this is simply an example of options available.

But, there is some resistance to this change, so let’s try to clear the air.

But my old software makes life easier…

Yes, the all in one programs are handy. They give you all of your information, in one central location. And if you’ve been using the program for a while, you’re probably pretty acquainted with using it. You know what to enter, where to enter it and what kind of output you will get. What you may not realize is being in the cloud could make life even easier. Sure there will be a learning curve, but if the cloud makes your life even easier, this new way of doing things might not be so bad.

But these new options don’t have everything all in one…

When you opt to move into the new world of accounting software, you’re often faced with choices for each function, rather than all being included in one program. This can seem annoying and unnecessary when you’re used to everything being ready and available all in one place. But the truth is, you’re opening your business up to options that fit each function perfectly, rather than trying to make a one-size-fits-all program fit your business. Your business is unique, and the programs you have in place to run it should be too.

So, I can tailor my selections to match my business?

Yes! When you step away from the all in one system and start seeking out new programs and applications that are available, you are able to find solutions to fit the exact needs of your business. For example, your old software may have had everything all in one place (think accounts receivable, accounts payable, inventory, time tracking, payroll, human resources, etc.). However, maybe it’s not great from a time tracking perspective or an inventory tracking perspective. That’s where these best of class applications come in. You are able to choose a specific app to fit your needs whether it be inventory, time and employees, storing documents, and more.

How do I make it all come together?

These cloud based systems can be integrated in the virtual ecosystem and can be managed and accessed virtually anywhere. When you choose programs that best fit each part of your business function, rather than using a cookie cutter approach, you can integrate the pieces together to make sure your business is running as smoothly as possible; not to mention automation so you are able to work on your business.

At the end of the day…

We’re not trying to persuade you one way or the other. We are, however, letting you know there are more options available for your business than meets the eye. You want what’s best for your business, and finding the right mix of accounting software and applications can help keep your business in tip top shape.

Warning Signs to Avoid

By: Ryan Renner, Eide Bailly LLP

As tax season grows closer and closer, it’s time to start looking at your books so you know where your business stands. Maybe you look at your books often (good for you!), or maybe they’ve gotten a little dusty since last tax season. Either way, getting a head start and looking at your books now can help make sure there are no hidden surprises ready to jump out at you. In fact, there are some warning signs that could mean something is wrong.

Bank Reconciliations

Arguably the most obvious warning sign is that cash no longer reconciles to your bank account. This mistake can usually be fixed by reviewing your account activity, starting from the last time your cash was in balance and working through your current period end. However, if you are completing a monthly or annual bank reconciliation and have significant unexplained differences, there’s a good chance something went wrong with the bookkeeping. It’s a never a good idea to let these – or any other – differences go, as they can continue to grow. Then you’ll have a real hole to dig your way out of.

Balance Sheet Blunders

Another obvious alert – but one that we see happen more often than you would think – is that the balance sheet no longer balances. When your balance sheet isn’t in balance, your business can also end up unbalanced, which can cause some serious issues for your business.

Most accounting software will usually not allow you to maintain an unbalanced balance sheet, or will provide you an alert that something you did will cause an imbalance. If you start getting these alerts or notice things aren’t balancing, it’s best to look at what could have caused the error and how to fix it before entering it into the balance sheet. Taking the time to figure out what went wrong right away will save you time and headaches in the future.

Equity Adjustments

Any time you record a manual adjustment to an equity account, besides normal equity transactions like owner contributions and distributions, something might not be quite right. Only in rare instances, such as correcting an accounting error, should you make manual adjustments to equity. In fact, you should consider if the adjustment would make more sense to be recorded within your income statement, rather than to your equity account. If you do find yourself making a lot of manual adjustments to your equity accounts, it may be time to discuss with a professional.

Account Reconciliations

Looking at your balance sheet account reconciliations can be another helpful way to see if there is anything wrong on the books. A couple items to look for in your account reconciliations include:

  • Account reconciliation detail doesn’t agree to the balance sheet amount
    • Similar to the bank reconciliation, if your account detail – such as accounts receivable and accounts payable detail – doesn’t agree with your balance sheet, it may indicate a problem with the reconciliation process. A detailed review of your account records can help you identify which difference needs to be corrected. (If you need a refresher on accounts payable and accounts receivable, look here).
  • Negative balances in your account reconciliation detail
    • While this may happen occasionally and not be an issue, there can be times when this indicates a problem. For example, if a customer has a significant negative accounts receivable balance, do you actually owe that customer a refund or was something entered incorrectly? On the other hand, if you have a negative accounts payable balance from one of your vendors, are you really expecting a refund or does that indicate an error with payment?

The Moral of the Story…

It’s safe to say you should never underestimate the power of the balance sheet when you are looking at your books. When things go wrong on the books, you can often look to the balance sheet (or these other areas) to see where those pesky problems are coming from. If you can catch these errors soon enough, you can get your business back in shape before tax season. Your business – and your CPAs – will thank you.

 

Changing Times: An Accounting History Lesson

A long, long time ago, when ancient civilizations ruled the earth, accounting came in to being … at least that’s what Wikipedia tells us. Needless to say, accounting is a tried and true profession. It’s also being affected by technology … just like everything else.

Ledgers & liquid paper

When I was younger, my mom was the bookkeeper for our farm, as well for a few other side projects. In her role as a bookkeeper, she kept track of everything by hand. She would use hard black ledger books with 14 column paper and record things in pencil. Hence the need for the best pencils on the market … as good as accountants are, sometimes you need to erase things and redo them. My mom even had liquid paper, the same color as the green ledger paper (because accountants are anal like that).

Accounting software

Fast forward a few (okay a little more than a few) years and I’m an accounting professional. In my 14 years in the profession, I’ve never used 14 column paper. I’ve had a couple clients hanging on to it, but they’ve always been rare. Rather, I typically use accounting software to help my clients with their financials (looking at you QuickBooks).

The advent of accounting software allowed businesses to operate more efficiently and changed the way accountants and business owners worked. You could open your snail mail and key in the necessary information, then print off checks to get the bills paid. The systems could even print invoices and track payments from your customers, all of which came in the mail.

The initial accounting software was somewhat easy to use, affordable and did all the basics … without the need to put pencil to paper.

Automation & efficiency

Somewhere along this path, we realized that paper copies could easily be replaced by paperless technology and increased automation. So technology changed accounting again. Rather than having a specific “accounting computer,” technology and applications moved to the cloud and could be accessed from anywhere, including your mobile phone.

Today, accountants and bookkeepers can access real time information faster than ever. They can take a picture on their phone and have it uploaded and coded instantly into their books. Bill pay is now automated and invoices magically appear via email, directly from your cloud accounting system. Point of sale systems are helping retail businesses, and talking directly to your accounting system.

When all this technology works together, it’s accounting magic. You now have interacting systems that record data in real time and allow you to have clean books and accurate financials in order to make sound business decisions. In other words, you have instant access to your numbers … and that’s a good thing.

The moral of the story

While all of this technology is making us more efficient, it’s also eliminating the human factor. No more licking envelopes and mailing paper bills, or keying in data at the end of the month. But this isn’t necessarily a bad thing. Technology is allowing bookkeepers, accountants and business owners to focus on what matters and not get wrapped up in the busy work.

Yes, it’s scary because it sounds like some of your staff (maybe even you) are being replaced by technology. Trust me, I understand (remember, I’m an accountant too). But it’s really okay. What technology is doing is automating the parts of the process that were subject to human error and making them more precise. This allows us numbers nerds to devote more time to analyzing the numbers and getting them in your hands must faster. It’s helping you make smarter business decisions.

 

 

Technology & Its Role in Your Business

Today’s business climate is rapidly changing as technology innovates at an accelerated rate. Almost 3 billion people (that’s 40% of the world’s population) use the Internet. Ninety percent of American adults own a cell phone, the vast majority of which are smartphones.

Technology is constantly changing, and occupying, the way we do business. It’s important to leverage technology strategically in order for your organization to succeed. Here are just a few reasons why you need to be strategic about aligning your technology and business goals:

  • It can make things run smoother. From streamlining processes to finally putting to rest all your extra Spreadsheets, technology solutions exist to help you fit your business, regardless of its size. Not sure if your business ready for upgraded technology? Here are a few triggers to explore.
  • It can help you retain young talent. Millennials and the generation below them have come up in the Digital Age. Rather than refuse the multi-device usage of this age, attempt to recognize changes, learn more about the millennium influence and how your business can be a better place for everyone.
  • It’s changing every day…. And it will affect your business plan. The Internet of Things effect is taking hold. Companies need to be proactive in staying up-to-date on technology and working to plan future infrastructure that will meet the growing demand. Learn more about the Internet of Things and how it can affect your business and industry.
  • It’s impacting your systems. The Digital Age is impacting every aspect of business. According to our Principal and Director of Business Applications, Stuart Tholen, “At the forefront of this impact are your systems, the platforms from which your entire organization functions, and trending technologies leveraged alongside optimized systems will generate unprecedented growth opportunities for your business.”

These are just a few of the many reasons to take a serious look at your existing technology and evaluate if it currently aligns with your overall business strategy. By assessing your organizational goals and the role technology can play in those goals, you can begin to build a better, and more efficient, picture of your business’ future.