Joanie Mann for Cooper Mann Consulting writes: I am a big fan of business analytical and reporting tools. I very
much believe in using industry benchmarks as a means to understand
various aspects of business performance as it is compared to others. I
feel strongly that this type of information is essential at all stages
of the business, and is useful for planning and forecasting as well as
in daily business management. There are a lot of tools available now
which provide KPI (key performance indicator) reporting, dashboards, and
industry comparisons. The thing that none of these tools provides is
an assurance that the underlying data is any good.
For data-driven reporting and analytical tools, the reliance upon
customer- reported and accumulated benchmark data is both the benefit
and the problem. Drawing upon actual customer financial data is what
makes the reporting solution useful – reflecting the realities of the
business as they are revealed in the accounting data. The problem is
that the data will often be flawed in some manner due to the lack of
accounting knowledge of the user. Particularly when small business
owners take it upon themselves to perform their own bookkeeping work,
there is a large potential for the information to be incomplete or
erroneous, or at least not truly reflective of the business finances.
It is essential that accounting professionals be involved in the
accounting process to ensure the accuracy of the information presented
to any analytical and reporting solution, thus improving the quality and
value of the information. Further, I would suggest that accounting
and business professionals would look to these types of tools to assist
in the identification of issues or conditions which exist in the
business requiring attention. Business owners would get far
greater value from the services of their accounting professionals, and
accountants would deliver a much higher level of tangible value to their
clients.
If the accounting professional is not regularly discussing business
issues and conditions with the small business client, the client can use
their own tools to attempt to gain the insight. HOWEVER (note the big
letters), any small business owner who tries to do their own books and
use their own decision-support tools is likely to run into problems.
While it is true that some accounting professionals are not offering the
level of guidance and insight (“value intelligence”) that some
analytical and reporting solutions might try to offer a small business
user, suggesting that the DIY reporting tool is useful when coupled with
DIY accounting is questionable at best. Why? Because most small
business owners and untrained bookkeepers do not know how to perform
proper accounting. And bad accounting data turns into bad business
decisions really fast, even with the coolest-looking reporting tool.
"Bad accounting data turns into bad business decisions really fast"
What’s the bottom line? The participation of a qualified accounting
professional is necessary to make sure business bookkeeping information
is properly accounted for, even and especially when great tools and
solutions designed to help small businesses get their work done are
being used. The accounting professional is necessary to make sure
information is classified correctly, connected and associated with the
proper supporting information, and that the data is complete. This is a
lot of work if done on a regular basis (which it should be) yet many
accounting firms don’t even offer the service, or offer it affordably.
Accounting professionals working with small businesses, look at it
this way: it makes more sense for you to engage a contract bookkeeper
and make a bit of money on the work they do to serve the client than it
does for you to
a) lose the client to an accountant offering bookkeeping services, or
b) charge the client to re-write up the information, which isn’t really profitable for you and isn’t as valuable to the client
Serving larger businesses may provide firms with an ability to be
more selective of the services they offer, but small business
accountants need to take an entirely different approach. Small business
accounting professionals need to be full-service providers and help
clients get the complete range of services they need, including daily
bookkeeping.
Accounting professionals helping their small business clients get
complete service – from basic bookkeeping to insightful planning and
advice – that’s the benchmark for high value accounting in the world of
small business. It’s the only way to make sure the numbers are right,
and that the business owner is looking at the right numbers.
Make Sense?
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