Helping SMBs Achieve Success Washington DC

Accountants who provide services to small businesses frequently find themselves in the role of diagnostician, trying to find out why a particular client is hemorrhaging cash and what the short- and long-term chances of survival are for the company. They also assist in determining what strategies will best brace the entity and help develop financial processes that are sound and grounded in solid accounting practices. This is a critical role because when challenges are recognized early enough, problems can be averted or minimized.

But still, a 2007 study by the Bureau of Labor Statistics cites that more than half of small businesses (56 percent) fail before lasting four years. Among the most failure-likely industries are hospitality (particularly restaurants and bars), transportation and apparel. While these sectors may stand out as the most vulnerable, all small businesses are at risk since they face a myriad of challenges such as cash flow, budgeting and strategic planning. And they frequently rely upon individuals with limited financial and business management experience.

These entrepreneurs may well be experts at their particular niche, but running the business side of any of these entities is a constant juggling match, especially when margins are small or seasonal variations must be accounted for. And then there's the people management aspects — customers, vendors, employees. Each has specific needs and expectations; and without meeting those needs, the business will experience trouble.

They depend on you, their accountant, to help them achieve success, and it starts with effectively managing all these business processes and people interactions. This review focuses on accounting and management programs designed for small businesses. Much more than just bookkeeping software, modern SMB systems often include advanced integrated functions for invoicing, point-of-sale, inventory control, payroll, contact management, electronic banking and e-commerce activities.

While these systems have grown in functionality, they have often become increasingly difficult to use for small business owners. Fortunately, in addition to these associated business functions, the technology vendors who develop such programs have also focused on the role of the public accountant. In addition to increased security controls and audit trail functions, some systems now include tools specifically designed to help transfer data to the professional's accounting system for write-up, reconciliation, adjustments and other services, while still allowing the business to operate and use the program. This is a vast improvement from the end-of-month crunch time that once dominated many accounting firms.

Enhanced accountant supervision and access to client business data has also been achieved through remote access technologies, sometimes referred to as virtual write-up services. With online access functions, professionals can log into a client's accounting system from their own office and perform tasks as needed, without requiring data transfer or client visits.

The latest innovations along these lines, however, are toward an integrated model where everybody — accountant and all clients — is working on the same system, just with different access rights and interfaces. I think of it as a bicycle tire, with the accountant at the hub and the spokes leading out to each individual client. Client "spokes" can only touch one point of the accounting system, while the professional can reach out to each of the clients. The actual accounting data is always under the control of the accounting firm, with clients logging in through online portals to run their bookkeeping and associated business programs. This model appears to be the best at maintaining total data integrity and security, while also strengthening the client-professional relationship.

The products reviewed here vary from fully web-based systems to traditional installed programs, and each has different core strengths and purposes. When selecting a business management and accounting system, finding one that matches workflow needs and the dynamics of a business' niche is critical. At the same time, it must be usable; if it isn't easy to learn and use, the entity won't see the most benefit, and the accountant may wind up spending too much time repairing honest (or dishonest) errors. So if you are helping a client find a new system, make sure they understand how important accurate transactions and record keeping are to the health of their business. Hopefully, this will improve their diagnosis and help them achieve long-term success.