Energized Accounting

Where is the Blog Going?

noreply@blogger.com (Bill Kennedy, CA) — Fri, 26 Jun 2009 13:31:00 +0000

You may have noticed that I haven't been posting as much lately. It's easy to dismiss not writing by talking about how busy I am. I don't travel as much any more, so I don't have that airport waiting room time to compose blog posts. I'm no longer a consultant, so I don't have the varied clients to provide blog fodder.

All those are true, but they don't explain the reason.

This morning I came across the blog of "The Bunny Suit Girl". One of her posts seemed particularly applicable to my situation:

Bitterness at work and blog entries
they really seem to be directly proportional
When I was unhappy at work
I had so much to blog about
Now I'm relatively happy
I barely write a line
No wonder,all those famous poets in Ancient China
most of them had very unhappy career

I am happy with my current position. Before taking it I hadn't realized how important it is to me to work for an organization that is making the world a better place.

I mentioned before that I will be spending more blog time on not for profit issues. I also plan to turn this blog into more of a column than just accounting software advice.

I would also like to find topics that spur others to add their comments. One thing that has surprised me over the past year is the lack of comments. At first, I took it personally, until I noticed that most accounting bloggers get few comments. So rather than thinking of this as an accounting blog, please consider it as a blog by an accountant and throw in your $0.02!

Action, Approval, Information - Which is it?

noreply@blogger.com (Bill Kennedy, CA) — Mon, 08 Jun 2009 01:58:00 +0000

"Bill, I'm not sure what you're asking the committee to do with the material you sent out for the meeting." The man on the phone was the committee Chair and he wanted to be sure he understood what was being asked of him before going into the meeting.

That was my mistake. As the resource person supporting the work of the committee, my job is to organize the material so that its purpose is crystal clear. For example, there are only three things you can ask of a Board or Committee:

Action - You're asking them to do something
Approval - You need their approval in order to move something forward
Information - You are reporting back to them

If the Chair is clear on what is being asked of the Committee, (s)he can set the right tone for the discussion. If the supporting written material is already organized so that it flows towards a clear objective, less time will be wasted. With clarity of purpose and well organized supporting material, the work of the Committee can be done quickly and effectively.

It's when there is no clear purpose that Committees often flounder and meetings become protracted. Members end up trying to second guess the intent of the material before them or worse, re-write it completely. When that happens, when you look around the room and see a lot of tired faces, the best thing is to refer the work back to where it came from with instructions to re-draft it.

By this I do not mean to imply that Committees should be manipulated into one specific direction. If the intent of the work before them is clear, it is also easier to reject it or send it back for more work. My personal experience with Committees is that they respect a well reasoned argument and will put a lot of energy into reviewing it if the information is brief and well presented. They will usually come up with comments that I had not considered, so that the end result is better than it would have been had I been working alone.

Which brings me to the topic of brevity. Churchill famously insisted that all briefs be reduced to a single page, but your Board / Committee probably wants a little more background than that. Readable writing is more important than just the length, although if a brief is perceived as being too long you run the risk of your Committee not reading it at all. If writing is not one of your strengths, by all means delegate! There are lots of freelance editors who will help you structure your thoughts. Here are some tips:

Use bullet points - they break up the monotony of the text and make it easy to find the important parts of your argument,
Use sub-headings - they organize your work -- try reading just the sub-headings, they should give you a feel for the whole document
Keep your sentences short - avoid compound, complex sentences
Avoid the passive voice - keep your prose active

What has your Board experience been like, whether from the staff viewpoint or the Board member's? Please join the discussion and leave a comment.

Lock 'em Up and Throw Away the Key

noreply@blogger.com (Bill Kennedy, CA) — Sat, 16 May 2009 16:21:00 +0000

Today's Globe and Mail newspaper had an article about a woman who clearly needed to be taught a lesson that would serve as a deterrent to others:

Bela Kosoian, a 38-year-old mother of two, says when she didn't hold the handrail [on the transit escalator] Wednesday, she was cuffed, dragged into a small holding cell and fined.

Okay, if the police are going to arrest people for that kind of violation, I have a few other transgressions that deserve their attention.

Accountants who cram too many columns of numbers onto one page. You know the ones I mean. They put the monthly actual, budget, last year month, budget variance, and last year month variance on the left side of the report, then the year to date actual, budget, last year, budget variance, last year variance and full year budget on the right side, making the font so small you need an electron microscope to see the numbers let alone make sense of them. Book 'em Danno.
Blaming the new system. The new computer has been blamed so many times for so many things, that I'm not buying that excuse any more. If you can't get your computer system to work, send me a manual payment. I'm not that picky, really.
Balanced with a difference. As Yoda says, "Balanced you are or unbalanced you are. There is no balanced with a difference." Take away their bookkeeping license!
Oh, I forgot to give you this last receipt. Everyone who prepares personal tax returns knows this miscreant, the person who lets you do all your work on their return only to come to you at the last minute with a piece of paper to add to the shoebox of forms they already dumped on you. Ladies and gentlemen of the jury, have you reached a verdict?
I just want to push a button and . . . This one's personal. I hate it when people oversimplify their reporting needs and assume that the system is designed to give them exactly what they need at the proverbial push of a button. We recommend the maximum penalty the law allows your honor.
It's immaterial. Auditors can say, "It's immaterial" all they like. That's music to my ears because it means I can stop working on that issue. But when anyone else hides behind materiality, they should be cuffed and jailed. If it isn't right, it's wrong. Off with their heads!
Blame the budget. If an expense is over budget or a revenue doesn't come in as planned, it's pointless to say the budget was wrong. You had your chance at budget time. Now it's "fixing the problem" time, so get out there and do it!
Put down the client. If a client complains, you should get down on your knees and thank them for the opportunity to serve them better. Most clients don't complain. They just take their business elsewhere. Officer, arrest this accountant!
Incomprehensible gobbledygook. Arguably, communication is half of the job of an accountant. Financial analysts who fill their reports with talk of accruals and negative variances being partially offset by timing differences deserve to be led off in chains.
Excel sins. They should reopen Alcatraz for people who:

Override the formula in a long column of calculations,
Change standard templates, such as budget or expense forms,
Type in the totals instead of calculating them,
Insert blank lines and columns into a table - you can make it readable without making it unsortable,
Allow different, incompatible versions of a spreadsheet float around,
Type numbers into cells without leaving any trail for others to follow, and
Forget to round their formula results so that their totals don't add.

What other indictable crimes do you know? Please use the comments below so I can pass them onto the authorities. They clearly have the time!

Who Says Accountants Aren't Cutting Edge?

noreply@blogger.com (Bill Kennedy, CA) — Sun, 26 Apr 2009 11:11:00 +0000

Recently, I have been twittering under the name AccountingWEB as we build the readership to that web site. I have found over 1,000 professional accountants on Twitter, arguably the most cutting edge of the new social networking tools. You guys rock!

If you don't know Twitter, it's a messaging (they call it "micro blogging") web site that allows you to post messages of up to 140 characters. You can then "follow" others, meaning that their messages will appear in your account. My friends who don't know Twitter directly tease me that Twitter is about people saying what they had for breakfast. That's true. There are some people who talk about the little things in their lives, but you don't have to follow them. You can follow people who write about technical issues (e.g. tax and regulatory changes), people who are funny, people who are political, etc. If you like to hear about the ways the Big 4 auditing firms are shooting themselves in the foot, may I recommend ReTheAuditors? Francine is funny to read.

To people who say Twitter is a big waste of time, I say, it sure can be! Just like gathering around the coffee pot, you can spend as little or as much time there as you want. When you're new to it, you tend to spend more time, but then you get comfortable with following a certain group of people and you get into a rhythm of what you want to post and suddenly, it doesn't take up so much time.

Try it, you'll like it! And if you want to follow me, try http://twitter.com/energized or http://twitter.com/AccountingWEB

This morning's breakfast: peanut butter bagel and banana.

Don't Shoot The Accountant . . .

noreply@blogger.com (Bill Kennedy, CA) — Thu, 23 Apr 2009 10:45:00 +0000

. . . he's doing his best.

Yesterday, David Kellermann, the newly appointed CFO of mortgage giant Freddie Mac committed suicide according to The Globe and Mail newspaper. This was an avoidable tragedy, one which we accountants need to learn from.

Some facts from the article:

The Federal Housing Finance Agency described him as "a person of the utmost ethical standards who was hardworking and knowledgeable in his field"
With Fannie Mae, Freddie Mac is responsible for about $6-trillion in mortgages, many of which are currently in default
Kellermann was one of the executives reviled because he was to receive a "bonus" of $850,000 over 16 months for his dedication and hard work pulling the company through this difficult time
Reporters and camera crews appeared at his home, making him fear for his family and property
He began working non-stop, sometimes returning home only to change clothes
He told a friend that no matter what he did, someone was always angry at him

I can see so many of my accounting friends in this picture, people who quietly put in the long hours to get the books right, people who shun the limelight, but are deeply committed and loyal to the company they serve. People who deserve support, but who are routinely overlooked because they are quiet and taken for granted.

When a company founders, the accountant is often put into an impossible situation, responding to critics and keeping the administration going despite layoffs and other crises. David had nothing to do with the bad lending decisions made by his employer. All he did was keep the books. Yet here he is, a victim of the sins of others.

If the world is caving in on you, talk to someone. Start with your partner, spouse, parent or best friend, but get it all out. Let someone see the impossible situation you're in and let them help you see where your responsibilities lie. You can't take on the whole problem yourself.

We are all poorer for the loss of this fine person.

R-E-S-P-E-C-T - IFRS for Nonprofits

noreply@blogger.com (Bill Kennedy, CA) — Thu, 26 Mar 2009 01:25:00 +0000

What might make some private companies or non-profit organizations in the United States adopt IFRS?
The eventual adoption of IFRS by small businesses and not-for-profit organizations is likely to be market driven. The IASB is developing a version of IFRS for small and medium-size entities that would minimize complexity and reduce the cost of financial statement preparation, yet allow users of those entities’ financial statements to assess financial position, cash flows, and performance.

That's the AICPA's position on the adoption by non-profit organizations of IFRS (International Financial Reporting Standards). We have the same issue here in Canada. The CICA (Canadian Institute of Chartered Accountants) is asking for input from charities. A number of church accountants convened recently in Toronto to consider the matter. We were unanimous: we like the current fund and deferral methods of accounting.

As it was explained to us, comparability is the goal of IFRS: every organization's financial statements need to be prepared on the same basis as every other organization. There is no provision for non-profits. There is no recognition that a non-profit is a fundamentally different kind of organization.

Fundamentally Different

When you buy a widget from ABC Company, you don't care what they do with the money you gave them. They could put it towards research, pay it out as a commission, dividend it to the owners, whatever. You don't care.

But when someone gives a dollar to a charity, they care where it is spent. They want to know which program it goes to, how much is used in administration and whether part of it has been saved as endowment capital. That's how fund accounting developed. A fund is like that jar in your kitchen you put a little of your pay into every week to save for a vacation. Funds are intuitive and simple. They keep the money sorted by the purpose it was intended for.

Another example: assets and liabilities are currently required to be valued at market value. Interest free loans are very common in charities. Discounting them using some arbitrary rate doesn't make sense in the non-profit world. The lender isn't looking for a monetary return on the loan. They want to support the cause. Charities end up having to set up complicated transactions in order for the "right" accounting result to be achieved under new rules. The donor's / lender's wishes have no effect.

The IFRS people really needed to get to know us before they threw us out with the bathwater! The overriding principles of non-profit accounting are stewardship and integrity: how well the non-profit looked after the resources put at its disposal and how well it fulfilled the funders' instructions. As the professional accountant was ending his IFRS explanation an image flashed into my mind. It was of a married couple sitting down with the financial statements of the Anglican (Episcopal) and United Churches and using financial analysis to decide which one to attend. I couldn't help but laugh.

All we want is a little R-E-S-P-E-C-T!

Accounting Idol

noreply@blogger.com (Bill Kennedy, CA) — Sat, 21 Mar 2009 02:58:00 +0000

Ladies and gentlemen, welcome to the last show of Accounting Idol. We started with 50 eager bean counters and now it's down to the final three. Tonight one, two or all three of you will be eliminated. Who will it be?

You thought that the final test was going to be easy, didn't you? All you had to do was represent the auditors at the annual general meeting of the shareholders. What you didn't know was that the company, your client, would be Enwrong, the most greedy, dishonest, uncaring corporation in North America.

Brad, please step forward. Brad, we have watched you struggle to become a person of the people. You changed your clothes, your hair, the music you listen to. You took communications courses. You studied popular psychology. You read self-help books. You did everything you could to be sympathetic, to be liked. Was that a tear we saw as you reported to the shareholders? But. And it's a big but. The people in that meeting didn't want a friend. They wanted blood. You didn't win them over, Brad, not even close. They mistook your offer of friendship for weakness. You lost your balance, Brad and now it's time for you to leave.

Wanda, please step forward. Wanda, you have the image. You are every inch the corporate accountant, from your conservative heels to your power suit to the steely look in your eyes. You have statistics at your finger tips. All the power brokers are in your Blackberry speed dial list. You can justify every decision. You have avoided any and all responsibility. But you forgot something. You can't find the truth by reading corporate press releases. You are the accountant, not the apologist. Just because the corporation pays your bill doesn't mean that you have to parrot the party line. Take your golden parachute and go.

Bob, you look like you slept in your suit. Your style is bland. You are gaining weight and losing hair. To be blunt, Bob, you don't have a commanding presence. But when you speak, Bob, you tell it like it is. You don't embellish, editorialize or emote. Everyone is entitled to their own opinion, but there is only one set of facts. Your language is plain and simple. You faced the music, Bob. You didn't duck and dodge the questions. You gave them what they needed to hear, the truth. That's what the people want from their accountants. Congratulations, you are this year's Accounting Idol!

[Wild applause. Zoom out. Roll credits. Fade to black. Go to commercial.]

New Newsletter for Charities

noreply@blogger.com (Bill Kennedy, CA) — Fri, 20 Mar 2009 16:00:00 +0000

Deloitte has just started a new newsletter called "A State of Change" for Canadian charities and not for profit organizations. Its goal:

With the rapid change in accounting standards, rules and regulations over the past few years and the anticipated changes in the upcoming years, this newsletter is being issued to provide information to assist you in understanding the impact that these changes will have on your organization.

The first issue is filled with changes to accounting and Canada Revenue Agency rules, which is a good thing. I applaud any effort to disseminate these changes in a readable and logical way. Ignorance of the law is never an excuse, but with the constantly changing rules and the nature of volunteer run organizations, it often is the reality.

Thank you, Deloitte!

Why Aren't You Using My Software?

noreply@blogger.com (Bill Kennedy, CA) — Fri, 20 Mar 2009 00:51:00 +0000

The picture on the screen was your average warehouse, but it wasn't your typical Microsoft corporate shot, i.e. it wasn't a perfect company with gleaming boxes on pristine shelves, where you'd swear you could eat off the floor. This one looked real. It was even a little -- dare I say it? -- messy. The Navision (Microsoft Dynamics NAV) developer from Copenhagen explained that this was a company they had used for research. The company had about $10 million dollars worth of inventory and already used Navision, but they weren't using the inventory features. That was why the developers were there. They wanted to see for themselves. They wanted to talk to real people in a real company and find out how they could make the software easier to use.

Sometimes it isn't enough to ask people what they want. They can tell you what they don't like, but they often have trouble telling you how to fix it. Then you have to be sure that the fix for one person doesn't cause problems for someone else. In this case, the reason the company wasn't using Inventory was that they found it too complicated and cumbersome. There were too many features they would never use. Theirs was just a simple business.

That's how the role tailored client was born in NAV2009. Every person has their own role to play. Each person needs access to different features. Jumping around between menus just wastes time and makes the system look complicated. The lay out of the options should tell their order. People should be able to tell at a glance how many transactions they have waiting for them so they can decide what to do next. If something isn't being used, it should be taken off the window. Even if you are filling in for someone else, it should be clear what needs to be done.

Sometimes important steps are taken without any technological wizardry. Sometimes all it takes is a watchful eye and a curious mind.

How to Connect at a Convention

noreply@blogger.com (Bill Kennedy, CA) — Sun, 15 Mar 2009 13:47:00 +0000

At 7,000 attendees, Microsoft Convergence was the biggest convention I have ever gone to. With that many people, connecting to the ones who are important to you becomes a challenge. The people going to Convergence are from different parts of the country, different industries and use different versions of Microsoft Dynamics. Just finding someone to have lunch with is a planning exercise. This picture is what I saw coming in for breakfast on the first day. Note that the tables are numbered. That helps you call someone on their cell phone to say where you are.

Microsoft works hard to help people connect. From the moment you register, you can set up a personal profile in the Convergence Connect web site. The web site also allows you to set up meetings at the conference in an area set aside for that purpose. For example, someone invited all CFO's using Dynamics NAV to a meeting. Even though we were in industries ranging from a zinc parts manufacturer to a church, we found we had a lot in common and decided to meet again after the conference.

Microsoft also plans for chance encounters. Here is a picture of my conference badge. You can tell which software I use (Microsoft Dynamics NAV), which industry I'm in (Non-Profit) and which user group I belong to (NAVUG) because there were bins where I could pick up the buttons. On the last day of the conference, someone with another faith based organization saw my Non-Profit button and said she had been looking all over for someone to talk to about the software choice they were about to make. We talked for about half an hour about NAV and also agreed to contact each other after the convention.

Other features: on the back of the badge is a pouch with a miniature schedule, which helps you know where to be when. People also used it to store their business cards. It wouldn't be Microsoft if it weren't computerized. The plastic name badge contained a chip with my information in it. All a trade show vendor or the people at the doors of the sessions had to do was point a reader at the card to record my information. I didn't even have to remove the card from the pouch.

Getting conference feedback is difficult. Microsoft computerized the session evaluations, made them short, offered a $5,000 travel voucher as a prize and said they would donate money to a the local Boys and Girls club for every evaluation completed. Still the number of evals completed was a fraction of the total number of sessions attended.

Finally, with that many people, it can be hard to make them all feel welcome. At Convergence, they had information booths as well as a small army of people in red shirts available to answer questions or tell you how to find the room you're searching for.

Is Your A/P Clerk a Knowledge Worker?

noreply@blogger.com (Bill Kennedy, CA) — Sun, 15 Mar 2009 03:13:00 +0000

Knowledge workers. The hype is everywhere, from Microsoft commercials to Gartner reports. This is the age of the knowledge worker. Just what does that mean? How has the job of the typical Accounts Payable clerk been transformed?

Let's take a little trip back in time to a retail operation I audited early in my career. Their accounts payable department took up one half of a floor in a small office building. The women (yes, they were all women and one of them actually tried to match me up with that nice young single credit manager) had large manual calculators called comptometers on their desks. Every day they would take the invoices received from the retail outlets for products received and check the calculations and the tax. They would then create batches of fifty invoices, attach an adding machine tape and send the stack off to the data entry department to be entered into the computer by another group.

Fast forward twenty years to that same department. There are far fewer accounts payable clerks and the data entry department is long gone. The clerks enter the invoices directly into the computer which does all the calculations so they can just check that the total on the invoice is correct. The system also compares the pricing back to the company's purchase order, another step that used to be handled manually. Have we reached the knowledge worker stage yet? Not quite.

Fast forward to now. There is about the same number of people in accounts payable, but they are handling a lot more transactions because the company has grown. There is no data entry because supplier invoices come into the system automatically via electronic data interchange (EDI). When accounts payable staff sit down at their workstations they see an icon to tell them how many documents are waiting for approval. As they open each document, information about the supplier pops up in a fact window. They can see statistics about the volume of transactions as well as being able to examine past transactions. If they see a large number of returns or problems with documentation, they are in a position to recommend that the supplier relationship be reviewed.

When I asked a Microsoft employee about their view of the typical accounting system user, his response was immediate, "Everyone sees the KPI's" (key performance indicators - i.e. the statistical analysis which measures progress). In this world everyone is a decision maker. Everyone is responsible for their goals. It isn't enough to just show up and put in your eight hours. Everyone is a manager of something.

Is that how you view your accounting staff? The more I think about it, the more I think that is the way to go. Things happen too quickly for all the decision making to climb up the chain of command. Besides, who has the time anyway? You just have to make sure that the internal processes and systems stay in synch. It's pointless to make all kinds of information available to someone who is not in a position to make any decisions. It just clutters the screen. Conversely, it's pointless to make people responsible for outcomes without giving them the information they need.

Does your company employ accounting clerks or knowledge workers? Please leave me a comment.

The Passionate Consultant

noreply@blogger.com (Bill Kennedy, CA) — Thu, 12 Mar 2009 20:07:00 +0000

Tucked away in the middle of the Latin Quarter of New Orleans is a hole in the wall dedicated to music. Not just any music, but jazz as it was played way back when. "Nawlins" is full of songs and this band knows them all. The Preservation Hall Jazz Band loves what it does. The plaster is barely hanging onto the walls. There is no sound system. Most of the people squeezed into the small space have to stand, but nobody cares. It's all about the music. Listening to it, I was struck by how happy it sounded, even when they were playing the blues.

After the show was over, we moved to a bar down the street. Also dedicated to jazz, this bar had polished tables, a stage for the band and a full sound system. But somehow the band just didn't seem to have that same passion for the music. They were all great musicians. The quality was good, but it looked to me like they were just doing their job.

Consulting is like that. At the end of the day, you don't hire a firm, you hire a person or a team. If they have passion for what they do, then they will put in the extra effort to find the best fit between you and your accounting system.

So how can you tell the difference?

Most firms will claim to be passionate about what they do. Usually, it's true. One or more people working there will truly have that extra drive. The question is, will they be on your project?

Here are some tips:

Before you agree to hire the consultants, meet the people who will be on your team. If the team is changed, you need the right to approve the new people.
Ask about experience with your industry / size of firm / geographic location. Make sure it's not just the consulting firm who has that experience, but it's also the team members.
Follow up on customer references. Ask the other customer about how well the team worked as well as the accounting system. Ask them what they would do differently the next time.
Passion is an emotion. Ask the proposed consulting team to describe other jobs they have worked on. Look for clues in their words, voice and body language. Are they enthusiastic? Do they embrace challenges? Is their language clear and direct? Can they talk intelligently about other, similar projects?

One thing: you have a major responsibility too. If you are not passionate about what you do, how can you expect an external consultant to be passionate? If you delay the project, how can you expect the consulting firm to hold the consultants until you are ready? If you are not clear about what you need, how can you expect a successful result?

If We Could Do It Over

noreply@blogger.com (Bill Kennedy, CA) — Wed, 11 Mar 2009 16:42:00 +0000

Two manufacturing customers were comparing notes as I sat down at the lunch table at Convergence, the Microsoft customer convention. Customer A was considering Microsoft software and Customer B was close to "going live" (i.e. stopping their old system and using the new one exclusively). In the course of the conversation, Customer B made four major points:

If we had to do it over, we would have more training of our development staff at the start of the project.
The project was a lot more complex than the VAR (the consulting firm that sold them the software) realized.
The VAR refused to admit that they had done anything wrong. They just kept charging time and materials regardless of how many resources they threw at the project.
We stopped letting the VAR run the project.

These are good lessons to consider if you're about to launch into a project, particularly when it involves processes that are as complex and company specific as manufacturing.

More Training

Training is tricky. If you do it all at once, there is a tendency to forget the material or get overloaded. If you do it too late, the customer may already be frustrated by working with a system they don't understand. It's a good idea to leave space between sessions to allow the people time to absorb and hopefully apply the lessons, but training needs should be raised at the regular status meetings to be sure nobody is spinning their wheels. You do have regular status meetings, don't you?

Complex Projects

The concept is simple. You design a product, build it and sell it, right? The deeper you get into a project though, the more complex it becomes. Sometimes, even the customer's managers don't appreciate the complexities. It isn't until someone who actually processes the transactions sees the system that some issues emerge. If the discussion gets to finger pointing, you've lost. People will stop talking and start blaming. This problem has to be stopped before it starts. From the beginning, both sides have to take the position that this is a joint discovery process. The key is constantly checking the assumptions and progress. That's another good use of regular status meetings.

Billing and Milestones

Customer B brought up a nice idea: set up the project as being time and materials, but once the milestones are set, get a firm quote for each one. That spreads the risk between both the customer and the consulting firm. I don't have any experience with that scenario. If you do, please leave a comment.

Whose Project Is It?

Project Management theory is clear on this point. The project is always the customer's responsibility. The customer leads the project. It cannot be effectively delegated to an outside vendor or subcontractor. If you don't have a qualified person on staff, engage an independent project manager. The consulting firm can and should have someone to manage THEIR responsibilities, but that person should not be put in charge of the whole project. They have neither the authority to delegate work to the customer's staff, nor do they understand the full scope of the project.

Resolution

To resolve their issues, Customer B took control of the project and went directly to Microsoft and the developers of the add-on package that handled manufacturing. The project ended up exceeding budget, but they are close to going live and are confident that the software will work for them. Their experience will help them in future projects, particularly if they document it as part of a Lessons Learned session.

Can You Teach Innovation?

noreply@blogger.com (Bill Kennedy, CA) — Wed, 11 Mar 2009 16:02:00 +0000

Can someone learn how to be innovative? Tom Kelley, the General Manager of IDEO, definitely thinks so. He freely admits that he was skeptical when his firm departed from its history of hiring only engineers and started looking for "soft" skills, like anthropology. Yesterday I attended his session, "Ten Faces of Innovation" as part of the Microsoft Convergence accounting customer conference. I too was skeptical. Too often, sessions like this are full of management metaphor, animal allegory and fluff. This one made me think.

Tom used the examples of Sony and Samsung to demonstrate what it looks like when a hungry competitor starts taking a little slice of your pie. But he quickly moved on to his main point: there is no substitute to directly obsesrving how your customers use your product. Focus groups and surveys, he says, are fine for small innovations, but the big innovations require more work.

Applying the Lesson

What I love about a conference is that you can hear a key note speech on a general topic like innovation and then move to a detailed presentation where you can apply what you just learned. This morning I attended a session on getting the most from your distribution software. Part way through the software demonstration, Philippe Jacobsen, a Program Manager with Microsoft in Copenhagen showed some pictures of an actual warehouse. The pictures were not the type of sanitized, you-could-eat-off-the-floor kind of warehouse you usually see in Microsoft promotional material. In fact the place looked a little cluttered (i.e. like a real warehouse). Philippe paused to say that he had visited this company as part of his research. The company had used the Dynamics NAV system for years, but had never implemented the Distribution features, despite having inventory valued at over $10 million. His question was why. The answer was simple: the distribution features were too complex. They just wanted a simple system.

Keeping It Simple

Designing simplicity into a system is tough. It requires a lot of observation and analysis about how people use your product. Tom used the example of a defibrillator IDEO designed. Here's the picture. In an emergency situation, do you think it would be easy to use?

Microsoft's approach to making replenishment easy to use is to have the documents and screens follow the "simple" route. If you want to use the advanced features, you can drill down at key points in the process and open a window.

The challenge is and always will be to design general purpose software that fits diverse situations. Warehousing and distribution are areas where there is a wide variety of best (and not so good, but firmly entrenched) practices.

What has been your experience?

Downturn for Accountants?

noreply@blogger.com (Bill Kennedy, CA) — Wed, 11 Mar 2009 05:22:00 +0000

This evening I had dinner with an analyst from IDC who follows accounting technology, specifically Enterprise Applications. He doesn't see a slowing down for sales in this area, as companies are using technology to save money.

This view was borne out by a representative from WennSoft, a developer of job costing software for Microsoft Dynamics. He hasn't seen any slow down in business over the last few weeks.

My suspicion is that companies are completing their current accounting software projects, some of which can take years, but I'm not convinced that there are a lot of people looking to start new projects at this time.

Networking for Geeks

noreply@blogger.com (Bill Kennedy, CA) — Wed, 11 Mar 2009 04:47:00 +0000

How do you network if you're in a crowd of strangers and you're not particularly good at it anyway? I'm sure that's a question that the organizers of the Microsoft Convergence conference for their accounting system customers thought long and hard about.

I have to hand it to them for being innovative. Not only did they hold the conference in New Orleans, which is still recovering from the effects of hurricane Katrina, but they also asked attendees to volunteer on a Habitat for Humanity project creating houses for people who couldn't otherwise afford one. What better way to get to know someone than to be swinging a hammer right next to them?

The volunteers wheeled sand into place to improve the drainage, as well as framing a new house in a project dedicated to New Orleans musicians.

Microsoft also throws an awesome party. There were Mardi Gras revelers throwing beads, clowns on stilts, dueling pianos, a rock band and all the cajun food you could possibly want. For the more serious minded, a tour of the aquarium was included. Watching the divers feed broccoli to the sting rays was fascinating as well as being a very good use of broccoli!

A software tool developed for the event allows all attendees to create their own profile and arrange meetings with other attendees. Using it, I discovered that one of our customers also uses Dynamics NAV and is interested in talking to other users of the inventory system. I don't think I would have found out that information any other way.

Reaching out to other Dynamics users has been rewarding for me. Comparing notes with someone who has faced the same issues can save a lot of time, not to mention consulting dollars. Microsoft actively supports the user groups AXUG, GPUG, CRMUG and NAVUG.

Turning the Queen Mary

noreply@blogger.com (Bill Kennedy, CA) — Wed, 11 Mar 2009 04:33:00 +0000

How do you get the attention of the people who developed your accounting system? How do you let them know the new features you would like to see or what you find really frustrating? If you had five minutes alone with the chief programmer, what would you say?

That isn't as impossible as it might seem. It really isn't like turning the Queen Mary. Would it surprise you to know that the development teams are hungry for input from the people who use their system? I'm at the annual Microsoft customer conference for accounting systems, "Convergence". Yesterday I attended the Dynamics NAV (formerly Navision) user group NAVUG meeting. Bill Clough, the Research Manager for Microsoft Dynamics gave a presentation where he announced that Microsoft is starting a research council. They are looking for interested volunteer users and resellers ("Partners") to participate in surveys, roundtable discussions, focus groups and conferences calls.

For me that's the key, by participating in the developer's events, we customers are raising our hands and saying we want to be involved.

Before coming, I asked our users and IT department for any questions. At Convergence, I dropped into the Navision Experts area. There were about 8 people there ready to answer any question about the product, so I sat down with Tom Loyal and went through my list. At the end of our conversation, he encouraged me to go to the feedback booth where I can record my feedback about Navision and/or Microsoft. He said they take that kind of input very seriously. After all, users are spending a lot of time and money to be here.

Every major software vendor has some kind of customer event if they are still in business. If you would like a say in the future of your software, get involved!

AccountingWeb is now on Twitter

noreply@blogger.com (Bill Kennedy, CA) — Sat, 07 Mar 2009 14:33:00 +0000

Which new technology should you invest your time in? Which of these self-titled experts and gurus should you follow? My simple approach to these questions has been to try before I buy. Even with free internet tools, it takes a lot of time to get set up and going.

Blogging

My first blog was an experiment for a volunteer group. It did not touch my work or my career, so I was free to experiment. The result was that within a month I felt confident enough to create this blog. With every experiment, the key is to have some way to measure success. In my case, it was Google Analytics. I watched the number of unique visits to my experimental blog go up and up, while the number of visits to my "serious" blog stayed at a disappointing 8 per day (which I figured was just the internet search bots).

Being able to compare the two blogs gave me some hints. The experimental blog showed me that I can write well enough to attract readers. I read the advice blogs from others who had gone before, and I thought that I was covering all the bases. Still, the lack of readers forced me to question my assumptions. After several months I came to the conclusion that my approach was fundamentally wrong. I thought that if I could just build it, they (i.e. readers) would come. The reality is that just having good content is not enough. You really have to promote it.

I searched the web for the words "blog" and "accounting". That's how I found AccountingWeb.com. When I approached them about adding my blog to their web site, they were very enthusiastic. Since then they have been supportive, suggesting topics, promoting my blog and checking in with me if I haven't posted for a while. Rob Nance and his team are good to work with.

Twitter

Meanwhile, a friend told me about Twitter.com. Like blogging, I first set up a personal account and tried it out. I followed a few people and saw how viral it can be. You see someone make an interesting response to a third person, so you follow the link to that third person and perhaps decide to follow them directly. As your network grows, others see you following them. so they in turn follow you.

When I saw articles coming to Twitter via Tweetfeed.com, I realized that I could alert people to my blog entries. Once that was working, I started talking to AccountingWeb about using Twitter for their news items and blog entries. The result is history: you can find AccountingWeb at http://twitter.com/AccountingWeb.

R U My Mentor?

noreply@blogger.com (Bill Kennedy, CA) — Sat, 28 Feb 2009 19:32:00 +0000

Wouldn't it be nice to find someone who has seen it all before and is willing to share their experience with you and show you the ropes? Or maybe it would be nice to find someone young and eager to apply their book learning to the real world. Either way, we're talking about the mentor / protege relationship (although in some circles it's called the mentor / mentee relationship). Every professional body on the planet should have a formal mentorship program like the Project Management Institute Southern Ontario chapter.

My Door Is Always Open

How many times have you heard that from someone senior in your company? Even with all the best intentions in the world, the reality is that neither you or your potential mentor probably have that much unstructured time that you can have general discussions about your career. Left to chance meetings, it won't happen.

Just waiting to be noticed, recognized and promoted is a low probability tactic as well. You may well be the only person in your organization who appreciates your potential!

Making the First Move

What if you were a Controller and really admired how the VP of Marketing ran her department. What if you walked into her office when she wasn't busy and said, "You run an excellent department. Your people cover for each other without complaining. They also enjoy working here and with each other. I would like my department to run that way. I'm taking a course in leadership and working on a plan for my department, but I would appreciate practical input from someone who understands what it's like working here. Would you have one hour a week to check in with me about how we're doing?" Who could say no to that?

Here are some things to consider:

Ask for a specific amount of time from your mentor (e.g. an hour a week). They are busy, but can probably find an hour a week.
Ask for help with something specific and something the mentor does easily. It shouldn't look like you're asking for a lot of their time or effort.
Limit the length of the relationship. If the project you want help with is successful, you can always go back and ask about something else afterwards.
The mentee sets the agenda. Always go to your mentor with a specific question or discussion point in mind. You don't want to waste the mentor's time.
The PMI mentoring program has participants complete a mentoring agreement that specifies what the mentee wants to accomplish as well as when and where the two will meet.
Don't be shy - if you don't ask for help, you won't receive it. You might be afraid that asking for help will be viewed as a sign of weakness, but usually the reverse is true. You are respected for realizing your limitations and working to overcome them.

What do mentors get out of the relationship? My experience has been that people are usually delighted to help someone who is sincerely looking to learn from them. It is truly a mutually beneficial relationship.

Why I'm Excited About Convergence

noreply@blogger.com (Bill Kennedy, CA) — Sat, 21 Feb 2009 19:51:00 +0000

Convergence is Microsoft's annual invitation to all of its business customers to meet and talk about accounting software. Yep, that's right. It's a giant convention of computer geeks and accounting nerds. Being a bit of both, I feel right in my element, but that's not why I'm excited.

There is a whole raft of technical sessions. A bunch of them are about Dynamics NAV (the product I use now) and Dynamics GP (the other product I implemented). There are speakers about applying the product to specific industries, integrating it with Microsoft Office and more general topics such as Kevin Schofield talking about where Microsoft is headed, but that's not why I'm excited.

Convergence is set up to encourage us end users to find each other. You can set up a profile that other users can search so that you can link up with others in the same industry and/or geographic area using the same software. Several user groups will also have their meetings there and I'm helping with the Ontario users, but that's not why I'm excited about going.

Sure, all these things are important, but for me, the key is the direct connection between those who make the software and those who use it. Our system was built (well, acquired actually, but you know what I mean) by Microsoft. Then it was modified for charities by Serenic. Then it was implemented by Altus. Then we started using it. That's four layers. It's time that layer 4 talked to layer 1! I love to meet the people who are truly passionate about what they do. They can tell you where they are headed and what they were thinking when they wrote the system you have. They can often give you fresh insight into how to use the system more efficiently/effectively. Often level 1 feedback gives you reason to go back to levels 2 and 3.

Then there are the vendors, all those hardy souls who have built software to make your life easier. Many people will scan the convention material for the specific software they're looking for and limit themselves to those vendors. Not me. I can do that kind of search more quickly with Google. I'm looking for ideas. Since there's no telling where a new idea is going to come from, I talk to as many vendors as I can. Who knows? I just might see the perfect solution for a friend's system, if not my own.

If you want to follow my progress through Convergence, I will be tweeting it for AccountingWeb.

They Keep Changing Their Minds

noreply@blogger.com (Bill Kennedy, CA) — Fri, 13 Feb 2009 12:45:00 +0000

The woman beside me and I were looking at the travel expense in the General Ledger and in the report before me. They didn't match. My report was in a different format than the GL. I made the comment that if we reorganized the cost centers in the GL to match the reporting format, she wouldn't have to do so much reconciliation.

"That's true," she said, "But they keep changing their minds about what they want."

Then she corrected herself. "Actually, they have been pretty consistent since they started that three year plan."

Ahah! She hit on the secret of financial reporting: the planning process needs to drive reporting. Here are some hallmarks of a good financial planning report.

It highlights the organization's drivers.
It makes responsibilities clear.
It spans more than one year.
It is intuitive to non-financial readers.
It is brief.

Drivers

What critical forces contribute the most to your business? (Hint: if your list has more than 10 items on it, try again.) For example, commodities prices and the foreign exchange market might have a significant impact on the cost of your raw materials, which in turn affects how much profit you make on every sale. Maybe your research department has contributed new products that have led you into new markets and higher sales. Maybe your business is highly sensitive to inflation or interest rates.

Whatever you identify as your business drivers, make sure their effect is front and center in the financial statements. Don't bury them in some page 10 inventory schedule.

Responsibilities

You should have one schedule that breaks down your goals by the people/department responsible for carrying them out. Often this is done by having a separate column for each one. Every number in the report is someone's responsibility, so there can be no finger pointing.

Multi-Year

Even if you feel that you can't see more than six months into the future, creating a multi-year plan helps you see the relationships between the different elements of your business. If this is unfamiliar territory for your staff, make them do it anyway. The trick is not to ignore the results when real life experience makes mincemeat out of your forecasts. Have a Lessons Learned session with the managers and go through the reasons the forecast went south. Everyone will learn and their forecasting abilities will get better. Trust me on this one.

Intuitive

Good leaders can see through the fog of business and maintain a clear vision of their goals. Good financial executives can grab that vision and express it in financial statements. Some tricks of the trade:

Divide your income statement into sections, with subtotals for each driver,
Don't cram too many columns of numbers onto one report (no more than 4),
Put the most important expenses first, and
Anticipate the questions and make sure your format answers them.

Brief
"Nice analysis," the Chair remarked to me. "Now get it down to 3 pages." When he saw the look on my face he added, "If you write three pages with lots of bullets, they'll read the whole report. If you write more than that they won't read it at all." He was right.

In a recent meeting I was asked for a "one pager" on an accounting issue. It was too complex for a one page analysis, but the Chair knew what he was doing. The committee discussed the issue and asked me to provide a five page analysis. Because they asked for it, they will be much more engaged in the issue than if I had presented the longer analysis first.

Lifelong Learning

noreply@blogger.com (Bill Kennedy, CA) — Thu, 29 Jan 2009 03:05:00 +0000

When you see a new version of your accounting software, does it feel like Christmas or April Fool's Day? Is your mood one of happy expectation or is your cynical side just waiting for disappointment?

Here's what I saw in a recent demonstration of a new software version to existing, knowledgeable users: negativity. The conversation was dominated with worries about retraining existing users on the new interface. I'm not saying that the people were wrong to focus on this point. It is a valid planning concern. I'm saying the people were wrong to let that issue dominate. Note it and move on! Accounting packages are complex. Learn as much from the demo as you can.

The guy beside me was more philosophical. "Yes, the new interface is different, but we have the option of implementing the new version with the old interface and converting the users gradually."

To me, lifelong learning does not consist of just taking the odd course or keeping up with your professional development units. It's more a matter of approaching every new experience as an opportunity to learn. You need to treat your knowledge like a plant that will whither unless it is tended to and nourished.

In addtion, knowledge is getting increasingly transient. What was cutting edge two years ago became generally accepted last year and is getting close to obsolete now. In my youth, I was quite the DOS jockey. Now, people don't even know what it stands for (Disk Operating System). As an aside, one of my pivotal career choices was what to specialize in after getting my Chartered Accountant designation. I was torn between tax and computers. I ended up rejecting tax because of how quickly the rules change and become obsolete. Looking back on it, I was lucky: I made the right decision for me, but for the wrong reason.

Here's a little practical advice: there will always be a gap between what the users want and what the software delivers. Don't stress about it. Write it down and strategize. Maybe the expectations can be dampened or delayed a little. Maybe some small changes can be made to the software. Maybe there are some imaginative work arounds for the problem. And maybe the issue will not seem so critical after the users have worked with the system for several months. In all of the system conversions I have done, there was something that the users liked better in their old system than in the new. After all there had to be some reason why they stuck with the old one for so long!

Photo credit: mushon

What Would You Do?

noreply@blogger.com (Bill Kennedy, CA) — Thu, 29 Jan 2009 02:55:00 +0000

Here's the situation: you're a large software company and you own several competing software packages. You want to keep your customers. In fact you want to build a relationship with them so they keep updating their software instead of holding on to one version until it's obsolete and then going with the newest product from a competitor.

Here are some of the problems.

The products have been built on different platforms. None of them uses your latest technology.
Accounting systems are incredibly complex, responding as they do to different business practices and regulatory environments. (To understand the complexity, just imagine building a system that handles both US sales tax and Canadian goods and services tax.)
Your first thought was to merge the packages, but your developers told you to forget it. It would take centuries of programming to capture all of the features of the packages.
Oh, by the way, each package has a loyal customer base that would view being forced to "upgrade" to a different package with deep suspicion.

What would you do?

Me, I would look for any common weaknesses in the packages. For example, if my customers were routinely turning to third party software, such as Crystal Reports, I would look to see what that problem was. Maybe I could replace the reporting in all of the packages with something new, e.g. SQL Reporting Services and save a lot of resources.

If I had a proven user interface that my customers were used to, such as Outlook, then I would move all of the packages to that same look and feel. This would start the process of bringing the different user groups together.

Without having any inside knowledge, this is what I think Microsoft is doing. I was just treated to a demonstration of Dynamics NAV 2009 (formerly Navision). Speaking as a jaded, skeptical accounting system user, I am happy with the directions I see. As outlined above, I like the overall approach. As is typical with Microsoft, there are teasers in the software, e.g. role based security that attempts to simplify setup by grouping tasks that are typically found in the same job description. I see the beginnings of a workflow system here. (Workflow means that the system passes transactions between users as each finishes their task, for example, when you complete a journal entry, it is automatically passed to your supervisor for approval and posting.)

I like the way that Microsoft is working with user displayable fields. The reality is that fields that are critical to my business may be unimportant to you. The best way to deal with this is to make all of the fields available, and allow the users to decide which ones they want to see. This has always been a strength of Navision. I like how the new version enhances the presentation by allowing the user to pick a few key fields that are shown in what used to be the tab. For example, you no longer have to go to the Foreign tab to see the currency field if that's the only one you need. The best part of this approach, for me, is that it makes maximum use of the screen. It will be easier to make the data entry windows work with older monitors.

Have you see NAV2009? What did you think?

CGA Magazine - Accountant Bloggers

noreply@blogger.com (Bill Kennedy, CA) — Fri, 19 Dec 2008 14:13:00 +0000

CGA Magazine, the voice of Canada's Certified General Accountants, has an article encouraging accountants to blog. If you're an accountant, you should read it (not just because it mentions this blog as a good example!)

If you’ve got something to say about accounting or, even better, a specific area of competency within the industry, having a blog will help establish your name online, and in a profession such as public accounting, getting your name out there is important for your career. Personal public relations should involve offline networking as well as an online component. Blogging will allow you to meet like-minded accountants from around the world and gain useful contacts.

But before you rush over to blogspot or wordpress to start your free blog, think for a moment whether you have the time and energy to write at least one article a week indefinitely. Business blogging is different than personal blogging. Each post should be carefully written. Blogging is easy to start but difficult to maintain.

Another difficult part of blogging is finding readers. Be prepared to promote your blog, i.e. find web sites and other publications willing to mention your work.

A good solution is to get one or two other accountants interested in writing about the same subjects as you, so you can share the load.

Fragile Giants (2)

noreply@blogger.com (Bill Kennedy, CA) — Fri, 19 Dec 2008 03:04:00 +0000

This is how a team falls apart: Remove a key player, and the social bonds that keep their friends on the job weaken. Before you know it, you've got a group of employees collecting paychecks, not a team working for a goal. Bugs go unfixed; servers crash; the design becomes ugly; and users flee. This could well happen to Flickr. Back up your photos now!

If that happens, what it tells us is that the culture of Flickr was always illusory — one built on personal ties rather than more lasting devotion to a cause. If so, the notion of exporting it to Yahoo was a delusion. That's the problem with turning a community into a commodity: Take away the people, and you have nothing left.

That is how the Valleywag blog described the layoff of a key member of the Flickr team: George Oates. It struck me how close this analysis was to my musings in Fragile Giants. Owen Thomas is talking about those same elusive values that take a company from Good to Great, whether a giant or not.

I disagree with Owen on the value of devotion to a cause as opposed to personal ties. I don't think that principles alone fire the human spirit unless they come in human form. We really need living, breathing principles that can show us the way past obstacles and help us see our potential. In other words, devotion alone is not enough. We need a leader, preferably one as principled as (s)he is charismatic.

I also wouldn't call the culture of Flickr illusory, but I would call it fragile.