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Financial Reporting 101 – Less is More

GrowthForce Admin — Fri, 07 Oct 2011 12:32:24 +0000

Today I’m going to start a new series on best practices for designing a Financial Reporting System. This is based on methodology I learned as a Manager of Accounting Systems at Ernst & Young, as well as designing accounting systems for hundreds of small businesses using QuickBooks as part of GrowthForce’s outsourced, online bookkeeping and controller service.

How do you develop a powerful financial reporting system? — by employing Stephen Covey’s 2nd Habit of Highly Effective People: BEGIN WITH THE END IN MIND.

You can do this by answering these questions:

What reports do you want to see?
How often do you want to see them?
Who needs to see them?
What decisions are they going to make from those reports.

The biggest mistake small business ceo’s make is creating way too many reports just because they can. Less is more. If you want a well-run organization, focus on just the information you need to make decisions. It cost money to produce each report. Not just to compile, produce and distribute the reports – but the cost to capture the information and reconcile it once its captured. There’s a cost to every additional field you require to be entered in the database. There’s another cost to reconcile each field that humans have entered. But the biggest cost is the lack of focus. If you have too many reports, they become meaningless and critical decisions get lost.

The next post in the reporting series will focus on how to decide which reports you should create.

Human Capital Strategy – Part 2

Stephen King — Wed, 14 Sep 2011 17:31:49 +0000

So what does strategic planning have to do with human capital?

What I like about having a formal human capital strategy is the ability to see how human resources fits together. When we first met with our Insperity recruiters they asked, what is your culture? What kind of behaviors are successful at GrowthForce? I hadn’t ever considered defining the “culture” or the “behaviors” that were successful for us. Before Insperity, if you could communicate well, were presentable, had QuickBooks experience and would work for the salary I was paying, and could fog a mirror, you were hired.

Now we’re smarter. The first step to a human capital strategy is defining the strategic plan. For most small businesses there is a company strategic plan – In the Owners Head. I knew where I wanted to take GrowthForce, but like most CEOs who are blowing and going that vision was not communicated clearly. If your staff tell you they need ESP to read your mind, read “Start with WHY?” by Simon Sinek and take the time to answer these questions to start your strategic plan.

Why do you exist?
Why do clients hire you?
Why would people want to work for you?

Take the “Why do you exist?” answer and lay out the vision for your company and define the initiatives to get there.

Then you can define the mission, vision and values.

Doing a strategic plan does two important things to a human capital strategy:

Helps force the CEO or management team agree and articulate the vision and plan to get there so the entire business can get aligned behind it. The key word here is alignment. Without this clarity of who you want to be and how you get there, you can’t pull the horses in the same direction – which is what a human capital strategy is all about.

It also provides a rallying point for everyone in the company which gives a reason for being. We all look for a higher purpose in life. Why am I here? If its just to come in and process accounts payable for my clients, its hard to get motivated to give that extra discretionary effort. But if its to be part of a team that is “reinventing the world of small business accounting in ways so profound the business owner will never go back”, that’s a completely different purpose, a different reason to wake up each day to do your job.

We hired Kris Kwalik, of Rodin Consulting to help us with our strategic plan. Insperity helped us take that strategic plan and use that to define: Mission, Vision, Core Values. In addition to the vision of reinventing the world of small business accounting, here’s what we came up with:

Mission

GrowthForce’s mission is to help high-performing small businesses grow by providing financial intelligence as a trusted service partner.

We exist to help small business grow by enabling owners to focus on their core competencies. They do this by leveraging our investment in technology & training which combines best practices in business automation with sound financial concepts.

Our mission will be accomplished by building a great place to work supported by well-trained, talented employees who build their careers while working close to their homes.

Core Values

GrowthForce operates and makes decisions based on six core values:

Integrity without compromise (we have open, honest communication and full transparency, especially with tough issues)
Delight clients (we proactively solve problems)
Take care of our employees (we laugh often and enjoy the journey)
Innovate & improve (ours is an environment that constantly learns from mistakes)
Own the outcome (each person is accountable for their goals or escalates any issues)
We work to live, not live to work

Now we have a starting point for HR. Who are we? What’s important?

Human Capital Stategy – Part 1

Stephen King — Mon, 12 Sep 2011 21:04:55 +0000

Today I’m starting a blog series on human capital. Why? GrowthForce is a service business. By definition that means people are the most important part of our business. When we talk about our outsourced bookkeeping and Controller services, we’re really talking about our bookkeepers and Controllers in Houston and the accounting technology and automated processes they use to deliver financial reports from QuickBooks.

A second fact about all service businesses is labor is the biggest expense in the business. In fact, after pricing, hiring is usually the most important decision the small business owner will make.

The ability to utilize staff time and labor dollars effectively is the key to success in a true service business. A human capital strategy is also known as a talent management strategy. How are you managing the talent you have in your organization to get you the greatest return on your investment in their salary – your biggest cost?

At GrowthForce we use Insperity (the PEO formerly known as Administaff) as our outsourced HR department. I’ve learned a lot as a client of Insperity and, because I have come to believe their services are a difference maker in our outsourced bookkeeping and controller services, I’ll share them here.

The official Insperity marketing speak on why I needed a human capital was what sold me originally, so I’ll start there:

Maximize the return and minimizing risk and cost on the people side of the business
Designing talent management systems to attract and retain the right people
Implementing performance based compensation systems to get discretionary effort
Applying performance management technologies to align people and define training needed so each person can achieve the highest and best purpose.

To turn this brochure-wear into tangible results I worked with our service team to break this down into actionable strategic initiatives. In GrowthForce we did that over the past four years by breaking this down into eight parts that are organized in what I call “circle of life”.

Over the next few posts I’ll review each aspect…

Four Business Trends Over the Next Decade #4

Stephen King — Fri, 29 Jul 2011 14:00:02 +0000

This is post #4 as a follow up to a seminar that I recently attended.

#4 Social Circle is the Winners Circle

Social networking over the next decade

image by http://dryicons.com

Social networking is going to create a sort of Participatory Economics where the influence of many will impact the decisions of few. The way we form relationships and communities will evolve and change. By the end of 2020 two-thirds of the world’s population will have internet access, mostly through mobile computing devices.

Clients will primarily find business over the internet and reputation and brand will be of utmost importance. Social media involvement will be the tool that allows businesses to do this. By providing helpful information and expertise businesses will earn the right to provide services to potential clients.

Read #1 The New Marketplace is Shifting the Playing Field
Read #2 Professionals and Clients Get a New Face
Read #3 Technology at Light Speed – From Data to Decision

Four Business Trends Over the Next Decade #3

Stephen King — Wed, 27 Jul 2011 14:26:15 +0000

This is post #3 of the insights I gained at Joe Woodard’s Scaling New Heights Keynote presentation from Jill Ward, Senior V.P. & General Manager Accounting Professional Division of Intuit. this one covers demographic trends.

#3 Technology at Light Speed – From Data to Decision

The digital generation has grown up with technology and expects it to grow quickly
This generation does not want to come to the office to meet with their accountant – they don’t even want to come in to work. They think about time differently. Work and life are more integrated.This might be because their mobile device has become part of their hand. There is no way to cut-off. Work/life balance is more about work/life flexibility. This means that they want a portal that will allow them to access data anytime and anywhere.

Seniors are not retiring, they are asking for help on whether they should be investing in new business. They view this “un-retirement” lifestyle as a financial planning opportunity.

As we talked about in my previous post, business is becoming more global and multicultural. Multicultural clients demand multi-talented support.

Data is critical for competitive advantage
By 2020 we will have 35 times more data than 2010. Data will continue to be an important value component in many products and services. Business data is invaluable – without it there is no way to see where we’ve been and plan where we will go. It is projected that statisticians and accountants who work with data will be in short supply. Some say that by 2020 there will be a shortage of 200,000 statisticians and 1 million analysts. Click here for Intuit’s report on accounting in the year 2020.

Working in the cloud
This trend will continue at it’s current fast pace. Mobile devices have become the primary computing tool for most of the world

Implications
We have been looking at accounting and bookkeeping differently for a long time. Three years ago, in a strategic planning retreat, we stated that traditional bookkeeping will become obsolete in less than 10 years. Why? Because web 2.0 technology is automating processes that historically had to be done by hand.

Our goal is to lead that transformation. It’s an opportunity, not a threat. We don’t want to just provide “compliance” we want to provide reports and analysis that our client’s CPA’s and CFO can use to more easily interpret thier books. We are constantly seeking better technology and QuickBooks integration. We have a new portal dashboard that is in Beta and we can’t wait to start offering it to our clients.

Read #1 The New Marketplace is Shifting the Playing Field
Read #2 Professionals and Clients Get a New Face

Four Business Trends Over the Next Decade #2

Stephen King — Mon, 25 Jul 2011 14:13:31 +0000

As a continuation of my insights gained at Joe Woodard’s Scaling New Heights keynote presentation from Jill Ward, Senior V.P. & General Manager Accounting Professional Division of Intuit, I’ll share her take on the demographic trends.

#2 Professionals and Clients Get a New Face

Digitally savvy “kids” & Generation Y are becoming grown-ups
Those that grew up during 1980 – 2000 have been exposed to far more technology than the generations before. From Atari to iPads they’ve had technology integrated into every day life. These 30-40 somethings are now able to have digital information at their finger-tips – literally. The shift has been made from laptops to smartphones and the work force is demanding tools that they are using in their personal lives.

At GrowthForce we’re seeing the digitally savvy staff view work/life balance differently than their parents. Instead of leaving work behind when they walk out the door, our staff are more connected and willing to answer work emails from their smart phones. That leads to great responsiveness for our clients, but we have to recognize work/life balance means putting the family first. The blurring of life after 9-5 means we have to support their personal needs during 9-5. That means we need to have flexibility during the day for life events. For example, seeing value in ability to attend school events, personal texting or, bringing kids to work when child care craps out. These things are more than a fair trade-off for staff who check email before they go to bed and as soon as they wake up

Boomers gray but don’t slow down
Soon the 55+ generation will control over half the US disposable income – good news for me! Those aged 55-65 will have the highest small business formation rate. It used to be automatic retirement at age 65. Now those gray hairs are valuable with years of experience. It means managers have to adjust expectations as they won’t be as tech savvy or willing to learn new skills. The company has to figure out how to maximize their talent and experience and minimize their weaknesses.

Cultural fusion connects tastes globally
By 2020 almost 20% of children born in the U.S. are multicultural and minorities will comprise 40% of the total U.S. population with half of that of Hispanic decent. Technology furthers cultural fusion by allowing the global flow of ideas and opinions. This flow will drive innovation.

Read #1 The New Marketplace is Shifting the Playing Field

Four Business Trends Over the Next Decade #1

Stephen King — Fri, 22 Jul 2011 13:34:46 +0000

I attended Joe Woodard’s Scaling New Heights conference in Las Vegas and really enjoyed the keynote by Jill Ward, Senior V.P. & General Manager Accounting Professional Division of Intuit. She had some insight into emerging trends that I think all CEO’s and business owners should keep in mind when planning strategically. I’ll share these insights over the next four posts.

#1 The New Marketplace is Shifting the Playing Field

Contingent workforce will grow
The contingent workforce (freelancers, contract workers, consultants, etc.) now accounts for about 25% of our workforce. Business flexibility and employee agility have increased because of cloud computing and virtual communication – skype and virtual meetings have become my norm. Jill shared a projection that by 2020 40% of the workforce will be contingent. That is a huge increase in less than 10 years. The number of self-employed, personal and micro business will increase and traditional full time jobs will be harder to find.

Big business is getting bigger and small businesses will get smaller
Price Waterhouse Coopers reports that the 4th largest big 4 firm is 10 times larger than the 10th firm and the 120 times larger than the 100th firm. The divide between big and small firms is large and will continue to grow. Small and medium size businesses have to share the pie of staff and contingent workforce. As a result, small firms will begin to partner with bigger firms to gain access to their sales force and larger firms will partner with smaller firms to leverage their agility and specialized talent.

Nice markets will flourish
Customers seek out goods and services that are tailored to their needs. As businesses get smaller they will begin to focus their offers and cater to niche markets. Variable cost access to business services and infrastructure.

Industry consolidation = intensified competition = global opportunity
Rather than getting scared at the thought of this shift, Jill encouraged us to see it as a great opportunity. For GrowthForce, we have already been aligning with larger businesses to leverage what they have. In addition, GrowthForce’s virtual methodology lends itself to global opportunity. For years we have had clients in Canada, Europe and Africa – we’ve recently added new clients in Asia. That would not have been possible ten years ago – before we embraced cloud computing.

Look for the next post in this series, Four Business Trends Over the Next Decade #2 – Professionals and Clients Get a New Face

It’s July, start of the second half of the year – What should I be doing now?

Stephen King — Tue, 19 Jul 2011 13:31:20 +0000

July is a great month to be an entrepreneur. It marks the end of the half way point through the year, which is a logical point to answer the question: How are we doing? Each July there three things I like to focus on:

Finance
The six month mark is a great time to evaluate the economics of your business. It’s late enough in the year to have meaningful information, but early enough make course correction and do something different if needed. If you don’t have a budget for the year, dump your P&L by month into Excel and do three things:

Ask, “How is income going to change in the second half?”

Ask, “What is your target gross profit % ?” This is a quick way to guesstimate cost of goods sold.

Plug in any changes to overhead costs – which usually occur in response to changes in income. Do you need to spend more on marketing or sales to reach your revenue targets? Do you need more space to handle any new staff hires?

If this is your first budget, don’t worry about getting it right. Just get ‘er done. nobody can predict the future so don’t spend a lot of time trying. Just take a stab and the next time you do a budget you’ll be that much smarter. Click here for a white paper on how to do your first budget.

People
July is also a great month to check in with each staff person and see how they are doing. If you value your staff as the most important resource in your company, you need to listen to their training needs, career goals and ideas for your business. Mid-year is a perfect time to do an informal check-in. This isn’t the formal annual review that you use for evaluating your best performers and, maybe, compensation adjustments. which should take place right after your busiest time of year. The mid-year check-in is designed to force your supervisors to do a listening campaign. If you empower your staff to help make the company better, you’ll get better. The people serving your clients know more about what’s broken than the CEO ever will.

Process
Summer, for most businesses, is also a good time to work on the business, not just in the business. I like to review our internal processes and focus on what we need to do to be ready to grow in the second half of the year. How can we make our outsourced bookkeeping and controller service more efficient and add more value to our client’s lives? What strategic initiatives should we invest in to help us reach our goal of being the leading provider of outsourced financial management services to small business? What new technology can we take advantage of? What management monitors gets done. What KPIs (Key performance indicators) should we be paying attention too? What are we measuring and what are we using to reward staff?

If you use July to focus on these three things, you can use August to relax, enjoy the family and remember we work to live, not live to work.

SMARTBase™ Links Business Processes with QuickBooks

GrowthForce Admin — Wed, 30 Jun 2010 20:17:55 +0000

GrowthForce has developed a proprietary Web-based Customer Relationship Management and Project Management system called SMARTBase.

SMARTBase is an application built using Intuit’s QuickBase with an added feature: SMARTBase integrates with QuickBooks.

As an Intuit Solution Provider and QuickBooks ProAdvisor, GrowthForce needed a CRM and project management application that married with its core competency: bookkeeping and controller services using QuickBooks, says James Cosman, SMARTBase lead developer. Cosman helped GrowthForce create and implement the SMARTBase system in the fall of 2009.

Prospect to Project Application

SMARTBase allows GrowthForce to manage workflow from “prospect to project” using Intuit products from start to finish. Unlike Act! or Sales Force.com, the system allows for time tracking, project management and sales force automation.

SMARTBase becomes the single place for entering project information – reducing double entry and increasing employee productivity. For example, field-based staff no longer have to wait until they are back in the office to fill out their time sheets. With SMARTBase, the teams can submit their timesheets from the road electronically and the information will record automatically into a QuickBooks general ledger for management review. “From a manager’s standpoint, this is a powerful tool,” states Cosman.

The integration of time tracking and QuickBooks is a standard integration component of SMARTBase, as are: customers, jobs and employee information integration. Companies can also use this web-based application to create custom forms that capture data needed to create invoices, purchase orders, sales orders and estimates.

SMARTBase

With SMARTBase, employees and managers have the same source for project updates. Any data recorded by the sales staff can be automatically transferred to a client’s service files. This improves customer satisfaction by reducing communications problems and time-consuming knowledge transfer from sales force to service teams.

SMARTBase can be customized to generate automatic reports to managers which flag variances in key performance indicators or delays in project workflow. For instance, a report can be set up so that if a job gets within ten percent of its budget, management gets an e-mail and they can then alert the client.

Significant Results

“SMARTBase is changing the way we are running our company,” acknowledges GrowthForce CEO Stephen King. He points out that management now has a single place to look at all client issues. They can get a central view of all client contacts and data, plus SMARTBase is a scalable solution which can grow with the business.

In addition, the labor savings are significant. GrowthForce estimates that they save at least 35 hours per week in project management and scheduling time by foregoing one-on-one discussions, team meetings and unnecessary client follow ups.

SMARTBase Roll Out

GrowthForce is so pleased with the results of SMARTBase that the company has created a version for their clients. While all businesses can benefit from SMARTBase, professional services businesses which track sales leads, implement projects and charge hourly rates are the best candidates for the innovative new system.

For a limited time, GrowthForce is offering a complimentary SMARTBase CRM which tracks sales leads for companies wanting to “test drive” the SMARTBase system. For more information, please e-mail info@growthforce.com or call 281-358-2007.

Steve King, CEO Recognized by CPA Societies

GrowthForce Admin — Wed, 30 Jun 2010 20:08:02 +0000

This spring, GrowthForce CEO Stephen King received two accolades from the Certified Public Accountants industry.

King Named to TSCPA Board

In March, King was named to the Board of Directors of the Texas Society of Certified Public Accountants. TSCPA is a nonprofit, voluntary, professional organization representing Texas CPAs.

With 20 local chapters statewide and 28,000 members, TSCPA has the largest in-state membership of any CPA organization in the nation. The Society is committed to serving the public interest with programs that advance the highest standards of ethics and practice within the CPA profession.

King has served on the Board of The Houston CPA Society, a member of the Texas Society of Certified Public Accountants, since April 2009. With this new nomination, he takes on a larger role helping to guide the direction of the Board on both a local and state level.

“Steve has been instrumental in providing guidance to the Board of The Houston CPA Society,” said Nancy A. Rutledge, Houston CPA Society executive director. “His outreach to local businesses and organizations has played a key role in creating valuable alliances. We are pleased he will now bring the same level of energy and vision to the state level.”

King Receives Visionary Award

Kathy Ploch, left, past president of the Houston CPA Society, presented King with the Visionary Award at the organization’s annual awards banquet held held at the BraeBurn Country Club on May 20.

At the event, Houston CPA Society Executive Director Rutledge called King “a true think-outside-the-box individual and definitely not your stereotypical CPA.” She noted that King has served the Society as chair of the Northeast Satellite, as a member of the Public Relations Committee and as an assistant to the Golf Classic Committee for their live auction.

“Steve challenges everyone to think ‘big box’,” stated Rutledge. “His challenges are welcomed by his conservative CPA peers.”