CFO And IT Services: A Winning Combination

In today's increasingly global and fast moving economic environment, successful companies recognize that finance and IT departments have grown increasingly complementary. One of the greatest advantages of working with small to mid-sized businesses is their ability to move quickly and efficiently to deliver services and address client issues. Synergies between CFO services and IT foster this type of business agility, and businesses which embrace these synergies discover they can demonstrate a competitive advantage to their clients and customers. As a starting point, following are four key areas to assess for integration between CFO and IT services.

Software roll-outs - This may appear obvious, but what is not always obvious is at what point the two areas should begin collaborating. Answer: as soon as possible. Software rollouts are most successful when finance and IT begin working together at the beginning of the process. A CFO can provide insight into financial reporting and management needs, as well as expectations of an accounting system or software program. Early involvement of IT services allows them to anticipate long term implications of the system and address what is technically capable. IT can ensure that the systems selected are flexible and scalable enough to meet future growth.

Greater access to data sharing - One of the benefits of updated accounting software and systems is their ability to provide access to key data for reporting needs. Newer systems allow authorized partners or employees access to key data by logging into the system themselves and generating automated reports. Previously, providing these partners or coworkers with critical reporting or real-time data required a CFO or Controller to compile and generate requested reports, often manually. When a CFO and IT services work collaboratively to identify areas appropriate for real-time data sharing, productivity increases as the data sharing is performed more efficiently.

Data security - With many finance departments now subscribing to financial SAAS programs and leveraging cloud based systems, ensuring data security within a business is critical. In addition, many companies have evolved into businesses with a high volume of web based transactions- purchases, inventory management, fund transfers, bank statement reconciliations, etc. The increasing volume of web based and remote financial related transactions necessitates unprecedented levels of data security. Delivering this level of data security requires the commitment of both the CFO and IT services.

Cost controls - One of the most significant ways a small to mid-sized business can increase profitability is to control costs. Working together, finance and IT can identify thresholds and establish automated triggers to notify CFOs when costs are surpassing this threshold. Success depends on the data being accurate, while also readily and immediately accessible. Even more importantly, IT involvement to automate these types of functions and reports means that a CFOs role can evolve from simply reporting to analysis, resulting in more robust financial management for small to midsized businesses.

These are just a few areas in which IT and CFO services can complement each other to make your financial operations more effective. Other areas to consider integrating the two are any place where analysis and decision making can be enhanced or where efficiencies and cost reductions are achieved. We are currently offering a free analysis of your business processes and accounting system. If you would like to learn more on how Analytix Solutions can help move your business forward, please call me directly at 781.503.9004 or email me at sales@aixsol.com

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

CFO Services to Improve Bottom Line

For any company, solid financial management practices are necessary to ensure profitability. As a business owner, where should you focus your efforts- on client deliverables, or on managing your revenue well? CFO services could be a solution to that issue.

Management of Funds

CFO services involve a careful scrutiny of your accounts, including profits and losses. Although this may sound obvious, it is easy to neglect regular account-keeping especially when your focus may be on meeting client requirements. Managing funds is an indispensable part of generating profits. Profitability does not come only from your customers. Practices such as managing costs, reducing unnecessary expenses, and enhancing productivity also play an active role in increasing your profits.

CFO services provide a detailed scrutiny of your revenue sources, revenue generation methods, and costs associated with revenue generation to determine areas that may be leading to decreased profitability. At a minimum, you should be able to answer the following questions about your finances:

• Are your account sheets updated and accurate?
• Do they reflect profits and losses accurately?
• Are you able to identify your overhead expenses correctly?
• Are there overhead costs that could be curtailed?

Managing Overheads

It is important to note that while overhead is necessary for a business to function, it may not be directly involved in revenue or profit generation. Thus, your travel expenses, phone bills, and client entertainment could all be categorized as overhead expenses. However, controlling overhead is not the only way to reduce costs; in fact, cutting too much overhead could negatively impact your revenue stream. For example, if your business offering is such that it requires significant client interaction, then reducing client entertainment overhead expenses may not be the best option for you. Professional CFO services can help you decide if your overhead requires curtailing or not; and if it does, you have access to the expertise to advise you in deciding on how much you need to reduce your expenses.

Managing Debtors

Each time you present a client with an invoice for services rendered, it means your customer is yet to pay you. Unless there is a very strict policy for Cash on Delivery, it is highly likely that a business incurs several invoices per day, amounting to a significant number per month. Each invoice represents customers who are debtors of your company. A collection of these invoices, or a list of your debtors, can be termed as a statement. A statement also contains other details, such as amount owed, date, and amount paid. Debtor aging is an important aspect of this statement. Age here refers to the amount of time a debt has remained unpaid.

When you hire professional CFO services, you are better informed about the state of your company's finances, and hence better prepared to reclaim the money. When debtor age goes beyond a limit that you fix, 30 days for example, you can contact your debtors and follow up on payment.

General Expenses Management

How do you decide whether your business is utilizing resources optimally? Or that the rates you have established for your services are competitive? When you hire professional CFO services, you are provided with informed advice on these types of questions. The CFO researches your accounts thoroughly and undertakes a detailed analysis around the general expenses incurred by your business. The professional CFO is well-positioned to guide you in managing your company's general expenses, including taking corrective action when needed.

Outsourcing the CFO

If you are a start-up or a small to mid-size business, you do not need to hire a full time CFO. Instead, consider outsourcing this function. Ideally, investigate providers with experience managing requirements of businesses similar to yours. This will give you added leverage in the form of their experience and expertise.

Shop around before you finalize your decision on a part-time CFO services provider. Some providers also offer scalability – a big benefit for small to medium-sized businesses and startups. Scalability allows you to tap into industry-standard services and infrastructure while paying only for the services you actually use. Thus, it produces immense savings on investing in infrastructure costs and costs associated with hiring and retaining trained employees.

When you outsource your CFO requirements, you receive the dual benefit of direct profitability through smart financial management combined with savings on investment costs otherwise spent on funding a dedicated CFO position in your company.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

5 Steps to Increasing Profitability in 2012

For most companies, the beginning of a new year signifies a time to take a retrospective look at the previous year and create goals and objectives for the year to come. This is a practice we adhere to at Analytix Solutions, as well. We are pleased with our 2011 successes, many of which we attribute to our ongoing client relationships and loyal client base. We are proud that our attrition rate remains at less than 5%.

Our 2011 revenue growth was 35%, and most of that growth was based on client and partner referrals. Not only did we acquire 30 new clients, most of our existing clients increased their commitment to the accounting services we provide or contracted with us to provide other complementary support services. In response to our clients, we also expanded our service offerings to meet client needs. Analytix Solutions became an Intacct Partner during 2011, which directly benefits clients who have outgrown QuickBooks and are searching for cloud based applications. We also launched a new, updated website and signed-on a few Partners to resell some of our accounting services. We thank all of our clients and appreciate their support.

For 2012, our goal is to continue to grow and prosper as a company. We have established a 30% target revenue growth goal. Our employee base has grown by 42%, and we are moving one of our facilities to larger space to accommodate our own internal growth and infrastructure requirements.

As we welcome the New Year, we would like to share with you our best practices for how we plan to further increase our own profitability in 2012.

1. Nurture existing client or customer relationships
There is an old business adage which claims that 20% of your customers generate 80% of your revenue. Do you know who your best customers are? Maintaining your existing customer base is less expensive than acquiring new ones. Focus on increasing business from your established clients based on the services they require to make their businesses run more effectively. Work to increase customer loyalty by providing them with rewards that recognize that loyalty. If you don't already, maintain a database of your existing customers that includes their buying behavior patterns to assist you in acknowledging their loyalty.

2. Determine key performance indicators
Specifically, you should have a clear understanding of which metrics are critical to determining your company's performance. Do you know what drivers directly impact your sales and cash flow? Is it a product's average number of days in inventory? Labor costs? Always have a comparison for your performance indicators so that you know where you stand compared to the previous year's indicators or industry benchmarks. Even more importantly, know the threshold for these indicators so that you can recognize underperformance in certain areas.

3. Review and analyze monthly financial statements
Make it a point to perform a realistic assessment of your financials each month. Pay attention to key performance indicators that you have established. If you don't have time or the expertise to perform this function, hire someone with CFO level expertise on a part-time basis. Timely and accurate data is critical to decision making success. Establish a monthly objective to review your financial statements for the month prior by the 15th of the new fiscal month.

4. Increase efficiency
This can be best accomplished by automating processes wherever possible to eliminate manual functions that take employee focus off of value added services. Invest in software programs and applications that will help accomplish this goal, especially ones that assist with payroll, time and billing, and data entry.

5. Outsource non-core tasks to provide you with more time to run your business
Assess the time you and your employees spend on tasks that require completion but really add little value to your own customers and customer relationships. Focus on those functions which allow you to foster relationships and grow your business. At Analytix, we "walk the talk" and recognize our own limitations. We outsource non-core tasks that are not central to the services we provide to our own clients.

Integrating these five practices into your operations will assist in improving your profitability. We are currently offering a free analysis of your accounting business processes and accounting system. If you would like to learn more on how Analytix Solutions can help improve your profitability in 2012, please call me directly at 781.503.9004 or email me at snpatel@aixsol.com.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

OUTSOURCING YOUR BOOKS - The smarter way to save money

The importance of maintaining proper books and accounts is not just to file proper taxes, but essential to check the financial pulse of your business. The survival of your business depends on efficient, timely, well ordered financial reports providing timely updates and alerts on problem areas of business. Correct diagnosis and subsequent remedies depends on identifying the problem and finding right solution at the right time.

Although Bookkeeping and Accounting is not as hard as Rocket Science that would require extremely qualified professionals, it does require necessary skills, analytical ability, and complete concentration to maintain accuracy to avoid serious and expensive problems. This might translate for most of us into being tedious, boring, and time consuming frustrating task. However, this bull needs to be taken by its horns. It’s a necessary evil, which is why services of bookkeeper/accountant/CPA are sought.

But is there a smarter way to tackle your books and accounts?

It may sound noise to some ears, but Outsourcing can really work for even the small businesses too. If it means significant cost savings, you can always argue that it is a default advantage and well touted by all vendors. But there are few other not so obvious benefits too.

It is no secret that large companies have been sub-contracting or outsourcing their non-core functions to expert vendors to take advantage of economies of scale. This option was not readily available to small firms earlier. But economic slump is inducing more and more companies to look at this option. And if you have a local Outsourcing vendor who can provide an on demand one-to-one support, most of your fears regarding Outsourcing can be put to rest.

The obvious advantages of outsourcing accounting, bookkeeping and tax services are::..
· Pay only for reasonable time taken to render services. Rates are generally charged on hourly

basis
· Saves up to 40-50% of operational costs as this does not require infrastructure or related support
· Quick turnaround of work
· 24x7 online access to your books and records
· Flexible and fully scalable modules
· Move towards a paperless office
· Reduces burden of staff and who can then be channelized to other productive activities
· Last but not the least, more time to strategize and concentrate on core functions

The not so obvious benefits of outsourcing are::..
· Access to ‘on demand’ qualified talent
· Access to service and client oriented vendors, since their existence depends on satisfying you.
· Flexibility towards changes and improvements demanded by your growing business which might be difficult to implement with in-house staff who are prone to resisting changes.
· No headache of retaining staff or training newbies. Time saved equals to money saved at the end of the day
· No requirements of any additional capital investment so there is reduction in total investment risk. More opportunities to invest in income generating areas.
· Outsource additional burden during busy time without adding costs of hiring new people.
· Save on add on costs like sick leave, benefits, bonus, promotions, training, house allowances etc without compromising on quality while getting work done faster.

However before jumping the band wagon and enjoying all the fruits from outsourcing, some essential points for consideration:
· Research the vendor thoroughly. Check credentials from other clients, networking and referral sources
· Partner with vendors having ethics and integrity instead of just being cost-oriented
· Vendor must be conversant with bookkeeping and accounting standards of your country
· Check the security and confidentiality policy of the vendor
· Check the quality standards and non-performance penalty clause of vendor
· Check how and where the disputes arising will be resolved
· Check whether your liability insurance covers outsourcing

The decision ultimately depends on business owner’s choice.

Do what is more appropriate for your company and reap long term benefits. The ultimate benefit of outsourcing if done right, leads to significant improvements in efficiency, cost savings and growth in the core functions of the business.