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.

Five Emerging Trends Defining Accounting Departments of the Future

Technology has become the driver changing the way companies exist and operate. The next generation of the workforce will be accustomed to operating in a completely technologically connected world with trusted relationships shaped by social platforms and social networking. Our economic environment has become one with diminished geographical boundaries. Increasingly, clients and customers are more focused on the caliber and quality of the work being performed- not on where it is being performed.

Accounting departments are not immune to these changes, and businesses must reassess their accounting departments to adapt to these trends.

1. Cloud Computing- Also termed software as a service, (SaaS), cloud computing is a new way of providing companies with software programs, allowing users to access the programs over the internet as opposed to having to load the software on an individual hard drive or central server. Emerging cloud and mobile technologies provide companies with increasingly more flexible options and 24/7 access to accounting data. In addition, cloud computing technologies have eliminated the problematic issue of single user systems that house accounting data on a single computer, allowing multiple user access. These technologies also eliminate the need to invest heavily in IT systems and staff thereby increasing profitability. With cloud computing programs, resolution of accounting system IT issues, data security and back-up often reside with the software developer taking the responsibility off of small to mid-sized businesses.

2. Outsourcing- This practice is becoming more and more prevalent across industries and is particularly beneficial to small to mid-sized companies. It provides a greater range of access to specific skill sets that may not be required or affordable on a fulltime basis. Outsourcing specific non-core tasks such as bookkeeping allow businesses to scale back services when they are not required or ramp up services during peak periods. Outsourcing functions such as CFO level services provide businesses with a high level expertise when they need it, expertise which may otherwise be in accessible or unaffordable if they needed to hire a full-time employee.

3. Virtual Office- Geographical boundaries are slowly being erased. It is now significantly less important where a company or its employees reside. This provides increased access to qualified accounting staff with a specific skill set, as they no longer need to be physically present in an office or even in a designated city or state to successfully accomplish accounting functions. This also reduces significant overhead expenses as office space to house staff is no longer essential to performing accounting and bookkeeping tasks. Tasks can be performed anytime, anywhere.

4. Self Service- Our world is becoming increasingly reliant on self-service as a result of technology. Today’s workforce is accustomed to 24/7 immediate access to information and the ability to quickly address tasks. Accounting departments must realize that monthly revenue and profitability reports are no longer sufficient. They must mobilize to offer real time access to live data so that decisions impacting the company can be made promptly and efficiently, by key decision makers with accessibility to this information.

5. Automation and Integration- Accounting departments must look to automate key business processes such as order entries and expense approvals to increase efficiency. This eliminates duplication of data entry and human error resulting in improved profitability. In addition, with access to more and more software programs companies must learn to integrate applications for accounting, CRM, e-commerce, payroll and POS so that they possess an all-inclusive snapshot of the company's financial status. Companies that learn to effectively integrate, manage and analyze this data will be far better equipped to move swiftly and decisively on critical matters that impact their business.

Businesses must embrace these trends that impact their accounting department to remain competitive. 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, please call directly at 781.503.9004 or email at sales@aixsol.com.

Cloud Computing: Transforming the face of Accounting

Cloud computing allows sharing of computing resources over the Internet. Information is stored in the cloud, remotely, instead of on a physical hard drive or server. Once implemented, employees no longer need to work inside the office; they can access information from remote locations as well, if they are connected through the Internet. They can also work as a team without being physically present at one location.

It is a new model of software service delivery that uses the Internet as a network to exchange information. In practice, cloud computing is all about services and not products, delivered over the Internet network. The advantage of the cloud is that it allows for centralized sharing of services, which in turn results in faster deployment of software, in turn leading to significant time and cost savings for business owners.

Cloud computing has already taken business management by storm; it is likely many companies are using some form of the cloud unknowingly, in the form of private networks.

Accounting and Cloud Computing

Accounting is seen as a traditional discipline where implementing cloud computing may seem like a distant dream. However, the reality is that accounting is already being touched by cloud computing.

There are many practical considerations that encourage the adaptation of the cloud for accounting purposes:
- Cloud computing results in scalable solutions.
- Cloud solutions can take off without a large capital or investment; provides better returns on investment.
- Reduces costs and time efforts in researching, establishing, and maintaining applications.
- Cloud solutions allow the system to be updated regularly.
- Cloud solutions result in increased adaptability of the system so that any new changes are reflected automatically and also initialized effectively.

All of these converge onto one truth: the cloud speeds up your accounting processes and helps make them much more accurate and error-free. This means your other equally vital functions, such as that of sales, can take up the majority of attention needed.

Further, integrating cloud computing into your existing systems is relatively easier. This is because it has application program interfaces that allow for seamless merging with existing or new systems. You can build up or strengthen existing applications on the same platform.

This also has significance for the small and medium-size business owners. They can outsource the entire function of accounting over the cloud with a host of benefits, including immense cost and time savings. The implementation of cloud is dependent on the vendor, hence, for a small or medium business, conducting accounting business over the cloud makes immense sense. Once you entrust the responsibility to a vendor, it is also the vendor who supplies interim IT and other support as required. So you save up significantly on infrastructure as well as on manpower hiring, training, and retention costs.

Security concerns are also easier to handle within a cloud. Since a single vendor is responsible for the system end-to-end, the vendor takes full responsibility for the application. You do not need to deploy several different security applications to take care of your data and information.

Further, the adaptability that is inherent within cloud systems ensures that the regulatory changes accounting is subject to get absorbed easily. Most of the current software is unable to adapt rapidly to changes and requirements that are the catchwords today.

Another big advantage of cloud computing for the small or medium sized business is that one can begin harvesting benefits without the need to invest a large amount of money or capital in the beginning: a fact that holds a big promise for small and mid-sized businesses.