Today marks the end of a 5 year and 2 month era. But it’s also the start of a new one. One of our star performers, Sharon McClafferty is leaving to look for new opportunities. She started as a sales coordinator and was quickly promoted into the role of sales where she quickly started outselling seasoned professionals. Within 12 months she was the sales manager where she grew and lead a team of 7 people. She had never sold anything before joining our company yet in 5 years she has sold in excess of $5M of new revenue. An absolute superstar. When Sharon sells she doesn’t sell. That’s the difference. She is an amazing relationship builder who makes a difference to those that she engages. She tells me she has done over 750 consultations to Accountants which is awesome.
On or close to the day she started I had the ‘leaving speech’ with her. It went something like this:
“Sharon, welcome to the team. We’re thrilled you’re here. I am sure you’re the right person for the job and I know there is a lot going on this week. I just wanted to talk to you for a few minutes about the day you leave. You will leave one day, everyone does. I know this is your first day and I know you’ll leave sometime in the future so I figured we should talk about it now. I have a number of hopes and desires for that inevitable day. Firstly, I hope we part on good company. I don’t want someone to fire you because you didn’t work out or make you redundant because of a business downturn. Secondly, I hope that you learn a lot, contribute a lot and have a lot of fun. Thirdly, I hope that you live by our values, service and culture standards and the standards we set become part of your life. And lastly when you look back at this block of time, no matter how long it is, you look back on it fondly as an amazing part of your career. Welcome to the team. That’s all I wanted to say.”
I do this with every new team member close to the day they start. Sharon has ticked all those boxes and she has grown into an extraordinary professional. The photo is with Colin Dunn, my business partner and I at Sharon’s wedding in December 2013. I was 10 kgs’ heavier then!
Attention Accountants: Feel free to use this article in your publications to help promote cloud Accounting. Please give credit to me as the author using the footer at the end.
Accounting can be sexy
The old system of accounting is really boring.
If you are like most small business owners each month you ‘transact’ (making it, buying it & selling it) through a manual system, a spreadsheet, a timesheet, a cash register and/or a receipt or quote book. Then progressively through the month (or at the end of the month) the data would be entered into a ‘hard drive’ accounting system – either by you or an external book keeper.
Sometime into the new month you may get an income or profit & loss statement which typically was wrong. You would monitor cash balances via internet banking or the check book. At the end of the year you would package up all of your receipts and a copy of the year end file from the accounting system and send it in to the external Accounting firm for processing & filing.
The external Accountant would get started on your file then stop, ask you questions, get started again, ask more questions and then sometime into the future (often months go by) they would finish your job and present you with a ‘set of financial statements.’
They have a meeting with you, do not explain things very well, get you to sign the documents, they then lodge/file the work with the government authorities and you’re done. The financial statements they present have old redundant data that reflect last year’s performance not yesterdays. How can you run a business on old redundant data?
Along the way with this most typical process I am sure your most important questions / issues were not explained very well – if at all. I find there are 4 key questions every small business owner wants and needs answered:
- How much tax do I have to pay and why?
- Where did the cash go?
- Am I am making money and if so how much?
- How much free cash do I have this month?
You will never get an accurate ‘real time’ answer to those 4 questions while you have an archaic ‘desktop’ or ‘hard drive’ based accounting system that involves manual data entry.
These systems were developed last century and they are well past their use by date.
Accounting can be sexy if you change your systems to ‘cloud’ (fancy word for internet based) technology.
Your accounting system ‘talked’ to your client management system which talked to your inventory system which talked to your distribution or point of sale system. All the technology was hosted on the internet and it synchronized with each other every day – or every minute if you wanted. They may be different providers for each component but they are linked together via the internet.
What you end up with is rich data, accurate data, less manual input and awesome reports to help you run your business in real time. Everything is super safe and easy to use.
In my business I get amazing dashboard reports automatically sent to my email every single day. I get client numbers, client frequency, most recent sales, forecast pipeline, cash balance and revenue & profit – yesterday, month and year to date. These reports give me a snapshot of the most important things going in my business every day. They enable me to run a better business because I have accurate information at my finger tips to make better management decisions.
I know how much money I am making. I know where the problematic areas are. I know how much cash I have to play with. I used to pay external advisers around $2,000 per month for ‘management reports’ that were late and not as accurate as what my systems generate for a fraction of the cost.
You cannot get this sort of data on multiple ‘hard drive’ or manual based systems. You just can’t. You can only get what I am talking about with cloud based technology.
It starts with the accounting system. When the data is in the cloud it can be seriously sexy!
© Rob Nixon
Rob Nixon is the global leader in helping Accounting & CPA firms become Real Time. He has been advising Accountants around the world since 1994. He is the founder & CEO of PANALITIX (www.panalitix.com) and the author of ‘Accounting Practices Don’t Add Up’ and his most recent book ‘Remaining Relevant’. You can follow him on twitter – @therobnixon – or via his blog – www.robnixon.com.
Today is the day that my latest book goes on sale. You can pre-order as of today – shipped on march 27. It’s been 21 years in the making. I have piled all of my best ideas into a 198 page ‘manual’ that has rich content, loads of process visuals and practical help. Although for Accountants any business will get value from it. One Accountant already ordered 100 copies for his team. If you’re an Accountant buy it. If you’re not then why not buy a copy for your Accountant. I want to massively influence lives and create a wave of change with this book. You can pre-order here.
On January 17 2015 I posted (in part) the post below. This Thursday we are running a webinar on how you can make cash-flow (profit, loss, balance sheet and cash-flow) forecasting easy and seriously valuable for your clients.
Details of the cash-flow webinar
Thursday February 19th, 1100-1200 – Brisbane time, free of charge.
If you want to see how you can offer real time cash-flow forecasting and monitoring then register here.
January 17 blog post.
We all know that cashflow (lack thereof) is the main reason businesses fail. The number one issue in businesses around the world right now is cashflow management.
We all know it and the Accounting profession is uniquely placed to help improve it.
Your clients want it as well. Well, not all clients want it. In our survey 29% said they did not. However, 71% said that if the service was reasonably priced and they could see value in it then they would be interested in exploring the idea.
It’s a no brainer. I ask Accountants what’s the most valuable service they can offer to their business clients. No surprises. It is cashflow monitoring and forecasting. So if it’s the most valuable then how many of your business clients have a live, working, accurate and real time cashflow forecast? Very few is always the answer. Yet this is the most valuable thing you can do. Here’s what we (the business community) want when it comes to cashflow. We want to know how much free cash we have each month to spend on whatever we want to spend it on. We want to know how we are tracking and what we can do to improve it. Your clients are not financial analysts like you. You can help us in this area.
The service you provide is a cashflow forecasting and monitoring service. In your definition you call it a ‘3 way rolling cashflow.’ It covers the cash flow forecast, the profit & loss and the balance sheet. If your client is borrowing money from a bank then the bank wants it. Even if your client is not borrowing money then it is a good thing to have. The problem with ‘hard drive’ based systems (or heaven forbid spreadsheets) is that once they are created they are out of date. By using old technology you cannot monitor the cashflow unless it is manually entered.
With cloud accounting and ‘add on’ partners like PANALITIX you can do this automatically. You can prepare the forecast based on historical data plus some planning. You can ‘normalize’ the numbers month to month with the client. You can consolidate the data as it is transacted at the client’s end and because the accounting data is linked to the ‘bank feeds,’ the cashflow, the forecast and the balance sheet is kept up to date every single day. Now that’s Real Time Accounting!
If the bank needs an update then you can provide it quickly. If your client wants it then you can provide it quickly. If you have got your client on a monitoring service then you can be immensely valuable.