Friday, 19 December 2008

CGA Magazine - Accountant Bloggers

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.

Thursday, 18 December 2008

Fragile Giants (2)

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.

Saturday, 13 December 2008

CFO = Maestro?

Is this your image of a conductor, someone who insists on being called "maestro", someone with a whim of iron who can quell opposition with a single insult, someone who makes trained professionals quake in their boots?

Now, let me tell you about Peter. He's a professional. He has exacting standards. He knows what he wants and he works hard to get it from the choir and musicians he conducts.

But somehow, naked aggression is not in his toolbox. You will hear him laugh rather than snarl. He is more supportive than demanding. But he's not soft. When the altos were hesitant about their entrance, he stopped the music and asked them to inject more confidence into their part. He then repeated the section.

He treats his soloists with respect. He will consult with them about timing, but still he knows what he wants. "There is a time for drama, for spitting out the consonants and cutting the notes short. This is not that time. You need to lament," he tells a tenor. Later in the practice he will compliment him when the tenor injects the right amount of drama into another part. Peter's direction is clear and precise. He is careful that everyone knows their cue. When people don't understand, he takes the time to choose other words to describe what he wants.

The work we're practicing is Handel's Messiah and Peter has invited me to play trumpet. There are over 50 individual pieces of music in the Messiah and the trumpet figures prominently in only three of them, so I have lots of time to study Peter's style.

If I had to use one word to describe Peter, it would be "professional". He doesn't use his position to demand respect, he earns it. He knows his voice will be heard because he knows how to listen. I have never seen him raise his voice, yet he makes it clear when he thinks you could play better or are out of alignment with his musical vision. On the whole he is a casual person, yet, when the situation requires it, he assumes the dignity and poise of his position.

He makes mistakes. He will stop the practice, say that he started at the wrong speed and make a note on his score so that he doesn't do it again. If someone on the team objects to one of his decisions, he will listen and is willing to change his approach. Somehow that makes other people willing to change their approach as well. The result is a committed, professional team of people who enjoy their work.

Now, what's your image of a CFO?

Thursday, 11 December 2008

Fragile Giants

When I looked up "Business Management" on the Amazon web site, I was greeted with more than 171,000 titles. How do you decide which ones are worth while? What I do is wait. Most of the management books I read are five or six years old. If they are still recommended by my friends after the buzzwords have died away, then I will crack the cover. Using this system I completely avoided TQM. Don't even ask me what it stands for!

My latest read is Good to Great by Jim Collins (2001, Harper). It is a rigorously researched study into what creates lasting success in companies. Now, here's the other reason why I read old business books: you get the benefit of 20/20 hindsight when looking at the company examples they use. For example, the companies cited in Good to Great include Fannie Mae, Freddie Mac and Circuit City. Just take a look at their share prices now!

I know that sounds like a cheap shot, and I don't mean to pour cold water on Collins' excellent research. The fact that some of his examples would no longer be classified as great companies does not invalidate the research. No, for me the lesson is that companies, even the huge great companies, are fragile. Their golden towers can be breached, and all it might take is a string of bad years, a major lawsuit or a technological innovation in a competitor's hands.

Value Your Values

Collins goes to great lengths to identify the keys to a great company. I'm not going to repeat them here, because they are meaningless without the accompanying analysis, but he does say that corporate values are one of them. He is careful to say that different great companies have achieved success with different values. For example, not every great company is customer centric or believes in a high quality product.

My point is that once you've found that sweet spot, hang onto it for dear life. Train everyone in it. Guard it with your whole corporate existence, because what the experience of the fragile giants shows is that once those values are lost, the slide from greatness can be fast.

Creative Conflict

A friend recently quoted these words to live by: "if two people always agree, then one of them is redundant." I firmly believe that there is a role for conflict in every organization. If I, as the accountant, am the steward of the organization's financial resources, then I have to be sure that they are well deployed. Inevitably that will lead to my asking probing questions of other company managers. We will probably disagree on major points, but if we continue to respect each other and listen to each other's arguments, then the result will be a better company.


How many companies really assess the risks they face? These days, "risk management" has become a euphemism for insurance, but business risks go far beyond the perils that insurance companies are willing to write policies for. For example, did the big 3 North American automobile manufacturers assess the business risk of their product line decisions? If they did, then clearly their analysis was faulty.

I am reminded of the words of Thomas Carlyle, "To the blind, all things are sudden", as quoted by Marshall McLuhan. The position of the big 3 has been being challenged for years by smaller, more efficient foreign cars. Despite the words of the top executives when they went, cap in hand, to the Senate, the only thing that we couldn't predict was exactly when the dam would burst.

Are we accountants fulfilling our role as the voice of prudence and financial stability? Are we still respected members of the senior management team? Or are the deals being made behind our backs?

Like a Marriage

Marriage relationships mature and change over time. In the early years, you have the excitement of facing obstacles together. Even though they may have been poor and struggling, if you ask people who have been married a long time when they were happiest in their marriage, many will point to those early years. I believe working at a company that is striving for greatness can be like that. The early times are exciting. You see yourself as the proverbial David, slaying the giant. Later on, when the goals have been met, how do you keep complacency from seeping in? Apple has been accused of eating its young, by launching new products that compete head to head with the existing product line. Maybe this is to keep the managers sharp as well as the technology.

Bottom Line

At the Church, we spend a lot of management, staff and volunteer time discerning what our ongoing purpose is in the world. Why are we here? What principles and priorities should guide our actions? Whom should we help? What are we being called to do? Even if you are not a church, you would be wise to ask those questions and live by the answers.

Friday, 5 December 2008

Two New Excel Functions

Microsoft has just announced two new Excel functions to be included in the Microsoft Office 2007 suite, Service Pack 2 (SP2) expected to be released 04/01/2009. I'm sure they will prove to be indispensable tools to accountants, particularly those involved in budgeting, financial reporting or financial modeling for charities and public corporations.

In these trying economic times, closing the gap between revenues and expenses can be challenging to say the least. Also, with consumer confidence ebbing and the price of overseas parts and raw materials mounting, it is increasingly difficult for companies to maintain their profit margins. That's where the first function, HOPE comes in. It will calculate the gap or margin that you will hopefully fill when your forecasted transactions are realized. Here's an excerpt from the documentation:



HOPE returns a specific dollar amount or percentage, based on the total revenue and total expense/cost cells you specify.



Result is either "%" for a margin calculation or "$" for a dollar amount.

Tot_revenue is the total revenue amount or the location of the cell containing the revenue amount.

Tot_cost is the total expense or cost amount or the location of the cell containing the cost amount.


  • If tot_revenue is greater than tot_cost, HOPE is unnecessary.
  • If the margin or dollar amount calculation is too high, HOPE returns the #VALUE! error value.

I should comment that in testing the beta version of this function I came across the #VALUE! error and discussed it with one of the developers. He said that the function is based on econometrics. There is a certain point where the gap between revenues and expenses/costs is so great that the value of HOPE required to balance the equation approaches infinity (i.e. an undefined value). In order to prevent the function from going into an infinite loop, it aborts and displays the error message.

To overcome this issue, Microsoft has introduced a second function, but you should employ it cautiously as it uses an enormous amount of system resources. The syntax is similar to HOPE, but the function is called PRAY.

Thursday, 4 December 2008

Interesting People

It takes a lot of talent to be a consistently funny writer for your whole career, but John Cleese has done just that. I was a Monty Python fan and watched the TV show every week. I quoted Python skits in high school (Say no more!!). I watched the movies and Fawlty Towers. And now, I have started listening to his podcasts.

When Cleese is just talking to the camera, he can be quite humble. In the video podcast I watched this morning, he talked about how fortunate he was to meet so many intelligent and interesting people through Python. Then he said, ". . . which wouldn't have happened if I'd been an accountant."

Them's fightin' words!

But before I bristle with righteous indignation at the callous insult levelled at my profession, let me state that I realize that no slight to accountants was intended. With all of his royalty earnings, I expect that John could truthfully say, "Some of my best friends are accountants."

But it does raise the question of what makes an accountant (or anybody for that matter) interesting.

Here's my take. (Feel free to agree/disagree in the comments below.) When I look back to all the people I have found interesting, the thing they have mostly in common is that they knew what they wanted and had the courage to go for it.

Actually, you don't have to start an international comedy troupe to be interesting. You could even be just an accountant. All you have to do is reach down deep inside you and find a cause that resonates. Find something or someone worth dedicating your life to. That will force you to dig deep and find the personal resources you never knew you had. That will force you to look outside yourself and look to others for assistance. When you have a purpose in life, the other things just seem to fall into place and when they don't, you will find previously untapped reserves of energy to take on the challenges. Then, I guarantee that people will find you interesting, but by then you won't care. You'll be too busy following your dream.

Like the accountant in the Monty Python skit who wanted to be a lion tamer . . . hey, wait a second. Maybe Cleese does have a thing about accountants after all!

Wednesday, 3 December 2008

What's Going On With This Blog?

Bloggers tend to write from personal experience. Recently I have been adding more content about not for profit enterprises to the Energized Accounting blog and there's a reason. For the past several months, I have been on contract to The United Church of Canada. I was recently offered the position of Executive Officer, Financial Services effective January 1, 2009. That's the official title, but externally the position is referred to as the Chief Financial Officer. As a result, this blog will change its focus.

When I started Energized Accounting, I was an accounting system implementation consultant and project manager, and my posts reflected what I was doing every day. Now I am not as involved in the day to day running of the accounting system and am more concerned with supporting the units (i.e. departments) running the programs and projects of the Church.

I expect there will still be a technology focus to this blog and I invite you to join us as we struggle to make efficient and effective use of emerging technologies (as well as the ones we already own!) I hope that the posts will be of general use, not just to those who work in the not for profit sector.

Thank you for coming along for the Energized Accounting ride. Please comment about anything and everything you've read here.

The Accountant's GiveList

The GiveList is a way of helping people without spending money. In their words,

Times are tight. We know, we know. We've all seen the scary headlines. Too many of the scary headlines. And we're all feeling the pressure in other ways too. But, still, we want to contribute what we can to making the world the better place. The GiveList gives you ideas and inspiration for just that: ways that you contribute without spending or buying. Or maybe giving while buying and spending a little less than usual.
What a wonderful idea. It immediately got me to thinking about how accountants can help. Please add your ideas as a comment to this blog. Let's get everyone talking about it!

Here's my list:
  • Do someone's taxes,
  • Volunteer at a tax clinic,
  • Ask a local charity if they need a treasurer (if they don't need one, I'll bet they know two or three who do),
  • Donate gently used winter clothing to a shelter (OK, you don't have to be an accountant to do that one),
  • Help a charity set up / improve their accounting system (if you don't have time to be a treasurer),
  • Coach a Junior Achievement team and teach some kids about business,
  • Hire a temporary student from the AIESEC business student exchange at the time of year when you really need help, so that a local student can get international business experience,
  • Teach someone how to balance their bankbook,
  • Raise money with a marathon, bikeathon, walkathon or any type of thon involving physical activity (if you're anything like me, it will do you a lot of good!)

Sunday, 23 November 2008

My Software is Better Than Yours

The software business is full of people trumpeting their software as being the best. At a conference I attended last week, someone waxed poetic about how much better Navision (Microsoft Dynamics NAV) is than Great Plains (Microsoft Dynamics GP). This happens to be a topic that I am qualified to weigh in on, being certified in both.

But I didn't. The only time I compare two software packages is when determining which is the better fit for a company.

When someone starts telling you how amazing the system they are selling is, my advice is to tune them out. I even tune out those charts that purport to compare software packages feature by feature. Why? Because you can't capture the differences in approach between two packages in a word or short sentence.

Take foreign currency exchange for example. Most major packages offer this feature, but when you get to know the individual packages you find out that there are significant differences in the way they actually handle foreign currency transactions. How does it treat foreign currency fluctuations in a standard costing environment? How does it do General Ledger revaluations? How does it reverse errors? Does it make adjustments only at the General Ledger level or does it affect the subledgers? How well do third part add-ons integrate with it? Will it allow the consolidation of subsidiary companies denominated in a foreign currency? These questions may be relevant to your company, in which case they are worth asking. If they are not, then why bother even making the comparison?

Before we even begin to implement software, I can guarantee you there will be significant areas where the software will not work the way you expect it to. We will have to look at the logic behind both the software and your business processes, as well as how expensive each is to alter. Then we will have to decide which way is best for your business. I would argue that how well a software package is implemented is as important to customer satisfaction as the underlying software. In other words, a great package poorly implemented will often be perceived as poor software. That is another reason I take personal opinions about software packages with a grain of salt.

At the end of the day, the question of which is best for your business is the only question worth asking. It will take a lot of research on your part to arrive at an objective answer, but the results are well worth the work.

Sunday, 9 November 2008

When to Call a Lawyer

It's the monthly church roast beef dinner fundraiser, only this time a health inspector has come and is asking probing questions. What do you do?

The insurance on your building is about to renew and the valuation is out of date. Why not save a few bucks on the premium?

The annual government Charity Information Return got sent to the old Treasurer's address and was never filed. What are the consequences?

When do you call in a lawyer? Last week, I went to the annual Church and Charity Law Seminar held by Terry Carter of the law firm Carters Professional Corporation. It answered these questions and more in a rapid fire format with a series of half hour presentations by a dozen lawyers in their area of specialty. Terry knows that the subjects are dry and technical, so he packs the seminar material with facts (and the occasional lawyer joke). The idea is that you can take your Carter's material back to the office with you. You don't have to remember the details. You just have to recognize when a situation might have legal implications. Then you can go to the notes and look up the issue. This was not a sales pitch. It was 100% practical.

This seminar is very popular. There were over 600 people there this year, the most they've ever had in the 14 years they've been running it. Of course, this is part of Carters marketing, but it works for everyone. Charities get excellent general legal tips for a very reasonable price and Carters keeps its name fresh in the minds of the clients it serves. Terry is clearly committed to helping charities and is willing to give up a day's billings from his professional team, not a small amount!

So if you're a charity and can make it to Toronto for a day, come to next year's seminar. Otherwise, subscribe to the Carters newsletter. If you're not a charity, think about this as an example of how to reach out to your clients or customers.

Saturday, 8 November 2008

New From Microsoft (NOT Software!)

There's something new from Microsoft, and it's not software. It's a methodology called Sure Step.

Why am I excited about a methodology? Because Microsoft has recognized that the reasons that projects fail or customers are unhappy with their system rarely have to do with the software. Just Google "why projects fail" (e.g. here, here and here). You typically don't see "the software was missing important features" as the reason. Project management issues usually top the list: lack of planning, scope creep, poor communications, lack of a proven methodology etc. etc.

In the world of medium sized accounting packages that I work in, project management is often viewed by customers as an unnecessary frill. When creating project budgets, I stopped putting in time for project management because it was routinely removed in the price negotiations with the customer. Instead, I built in time to create a project plan as well as for status meetings and progress reports.

The consultants and the software companies only have themselves to blame. During the sales process we minimize the difficulty of implementing new software. We talk about how easy it is, how everything is menu driven and can be accessed with the proverbial one click of the mouse. We minimize the work that needs to be done by the customer: designing their chart of accounts, downloading history from their existing accounting system or putting thought into how they want the reports to look.

Unless customers see themselves as at least a 50% partner in the success of the project, I guarantee you they will not get full use of the system they invested in. I'm not talking about a dramatic failure here. The result will just be that staff will not abandon their tried and true spreadsheets or side systems and embrace the new technology. Microsoft measures everything (just ask any Microsoft employee what getting a yellow or red light means). They measured software success and came up with the mind blowing statistic that 46% of software licenses go unused. This means that only half of the people you thought would use the new system will actually do so.

So, what should customers do? If you do nothing else, insist on a weekly progress meeting throughout the project, so you can be sure that the whole project gets completed, not just the minimum necessary to go live. The meetings should be short and only the senior people on the project need attend. This meeting is not for solving problems, it just brings them to light. The agenda is:

  • What was accomplished last week
  • What is planned for next week
  • Where we are in the project plan (you DO have a project plan, right?)
  • New or changed risks faced by the team
Weekly meetings force people to actually DO something or face the embarrassment of having nothing to report. They let you know who is waiting for whom. They inform everyone of the issues faced by others. They allow you to be proactive instead of just reacting to issues.

Also, during the sales process talk to your consultant about how they implement projects. If it's Microsoft software and the words "Sure Step" do not come up in the presentation, ask why. Ask them about what you need to do to ensure the project's success. Ask them how much of your staff's time you should budget for the project. If the answer seems too good to be true, then it probably is.

Monday, 13 October 2008

Sudoku & Mental Agility

Kevin was huddled over his handheld computer at the restaurant. My wife and I were joining him and had picked up his wife Joanne on the way. As we approached the table, she said, “He’s probably doing Su-do-ku. He says it helps with his mentally agility.”

Kevin showed me how his computer let him enter the numbers one through nine into a grid so that each box, row and column had each number only once. It was an impressive system, letting him store possible answers in each cell until he decided the right one. If you haven’t tried Sudoku, it’s quite an intricate puzzle.

“I too have a Japanese way to stay mentally agile,” I said. “It even sounds a little like yours. It’s called Ai-ki-do.”

“Never heard of it. Can you get it on the Blackberry?”

If you haven’t heard of Aikido, here’s a comparison between it and Sudoku:

Logical Relationships2 dimensions3 dimensions
Language ProcessingNoneJapanese vocabulary
Mental ManipulationNumericalSpatial
Co-ordination Hand / Eye Fine MotorHand / Leg / Body / Eye Gross and Fine Motor
LevelsBeginner / Intermediate / Advanced5 beginner levels, 7 master levels

OK, Aikido is not really comparable to Sudoku. It’s a martial art like Judo or Jujitsu. Maybe it’s silly to compare a numerical puzzle to a martial art, but the point I want to make is that, as accountants, our ability to manipulate numbers is already well developed and maintained by our work. The area we typically ignore is physical fitness. And your mental agility is intimately connected to your physical well being.

Oh No, Not Another Fitness Lecture

Like many people who divide their time between deskwork and business travel, I am somewhat overweight and underfit. Some things I have tried and learned from:

  • Swimming – I joined the YMCA, which had the advantages of having a club in every city I travelled to, and always having at least one lane open for lengths. Swimming proved to be a great way to relax after a day of meetings. It has many fitness advantages, such as very low impact on knees and other joints, but it did not prove effective for weight loss.
  • Dieting Atkins taught me the value of a high protein breakfast and lunch. A friend taught me about an apple in the middle of the afternoon to ward off drowsiness. I have already written about visiting a nutritionist who helped me navigate fast food restaurants. But I take the point that changing your overall eating habits is more effective than going on and off diets.
  • Personal Trainers – The accountant in me objects to the cost and perceived luxury of a personal trainer. I thought that I could guide myself through the exercise machines in the gym by reading the directions, thank you very much. The reality is that a good trainer knows
    • How far to push you without hurting yourself
    • How to translate your goals into specific exercises
    • How to stretch out before and after exercise
    • Which muscles to target and when your body is overcompensating.

    The fact is that my weekly appointment with the trainer keeps me from making excuses not to go to the gym, something I am prone to do. I have reconciled myself to the cost by limiting sessions to one per week, but going at least one other time (as well as Aikido twice a week.)
  • Aikido – Somehow, the addition of martial arts to the above made the difference for me: I actually started losing weight. But Aikido is much more than just exercise. It really is a test of mental alertness as you struggle with the Japanese terms, try to emulate the instructor, learn the moves, repeat the exercises and strive to remember and apply what you’ve learned. The support is excellent. It feels like there is a room full of people working to help me stop tripping over myself. While martial arts are generally about one person attacking another, Aikido is based on the idea of self-defense and doing minimal damage to your opponent, a lesson the business world could definitely use! Another advantage that I, as a beginner, have experienced is the idea of staying relaxed even while you are being attacked, again a good lesson for business.
  • Fun – Working muscles and counting calories meet nobody’s definition of enjoyment. But finding an activity that my whole family can do together as well as being thrown by my 13 year old daughter do count as fun.

    In the end, I don’t want to knock Sudoku. It’s something you can do on the subway or while you’re waiting for someone in a restaurant. Just don’t forget that there’s a physical side to mental agility.

Tuesday, 7 October 2008

Professional Development: The Trick

Most professional accountants remember their final exam. Even people in their eighties can tell you about the question they aced or totally blew. One memory that stuck with me was my friend Jim remarking to me as we exited the exam center, "If I ever learn anything else it will be by accident."

Well, times have changed. The accounting rules we learned may have seemed absolute and immutable at the time, but sadly that hasn't proved to be the case. I remember deciding not to specialize in tax because of the arbitrary way they could be altered by the stroke of a legislator's pen. So, what did I specialize in? Computers, where if something is three years old, it's ancient and obsolete.

About a decade ago I applied for a job. I remember thinking that the interview was going particularly well, that is until the interviewer said, "I see you got your accounting designation back in 1983. What have you done lately?" It was a fair comment. I realized that I had not paid enough attention to my skills. That propelled me to go for my specialist designation as well as a designation in project management. On the job experience is invaluable, but you have to keep up on the theory as well. Experience tells you what works. Theory tells you why.

So, I'm a big fan of continuing education for professionals. I cheered when compulsory professional development rules were introduced. The trick is to choose your courses strategically: make each course serve more than one purpose. For example,

  • If you have two designations, find courses that will qualify as professional development for both.
  • Try to combine professional development with an interest. If you want to be a better presenter, try giving courses instead of taking them.
  • Treat each course as a networking opportunity with both the lecturer and the other students.
  • Go beyond networking and look for new friends.
  • Try going beyond your comfort zone and try something related but new. It may just change your career direction.
  • Try to reuse your work. If you write a good essay, turn it into a presentation at the office, an article in a professional journal, or add it to your company web site or blog.
Finally, don't limit yourself to the education you have to do. Try thinking about things that you think it would be cool to learn. Don't worry whether they have any practical application, go with your gut. You'd be amazed how useful the knowledge will prove in the future.

Tuesday, 30 September 2008

Software Implementation 101

RSM Richter, a Canadian accounting firm, addressed software implementation in two recent issues of its midsized companies publication, Advantage. They are short, balanced and well worth reading. In Part 1, they do a good job of setting realistic expectations:

Documenting and automating every minute step of every process in a business cannot be put on a fixed, linear implementation schedule. Unforeseen problems will arise, requiring changes to those business processes and/or the software itself. Sometimes these changes can impact the timeline by weeks or months.

While their analysis is based on the larger Enterprise Resource Planning ("ERP") software packages, the principles are the same for any sized accounting implementation.

In Part 2 (not yet published to the web), they make a point that I would like to amplify: one of the responsibilities of the client is to "appoint a dedicated (and qualified) project manager and steering committee".

If I had to isolate one factor that points to the overall success or failure of an accounting implementation, it would be the dedication of a staff member to the project. Too often I have seen the software project just added on top of the staff's normal responsibilities. The result is that the implementation is sacrificed to whatever is most urgent to the staff member at any given time, i.e. work on the new system stops at month end, budget preparation time, quarterly reporting etc.

If the project is going to involve more than one person from the implementation consultant, the consultant typically appoints a project manager. Even then, the client needs to appoint their own project manager, someone who has the time and authority to ensure client staff do their part. From personal experience, I know that as an external consultant I cannot make anyone do anything on the client staff. I have to work through somebody senior who appreciates the value of the project.

Now that you have a realistic view of what is involved in an accounting software implementation, what if you aren't sure whether in fact you need a new system or not? David Kelly, a contributor to the Microsoft Midsize Business Center has some practical points here.

Bottom Line: if you are considering an accounting software implementation, I would recommend you read these ERP 101 newsletters. If you sell accounting software, I would recommend you get your potential clients to read them. It will help set realistic expecations for the project.

Thursday, 25 September 2008

Getting to Phase 2

How much of Excel do you use?

  • If you spent a little more time designing your key spreadsheets so that all of the calculations were consistent and the data flowed in a logical way, could you produce more effective reports?

  • If you learned a little more about graphing or pivot tables, could your presentations be a little more powerful?

Most accountants I know freely admit that they just scratch the surface of what Excel can do.

Now, what about your accounting system?

That's what I mean by Phase 2: the time when you take a hard look at how the system is being used versus what it's capable of. How much of the initial plan got implemented? How much of it was deferred because of time or budget constraints? Back in the heat of dealing with all of the issues of going live on your system you had to make some compromises to get the system up and working. What about taking some time now and revisiting those decisions? Pull out a list of the features that were identified as "nice to have's" and start to think about implementations.

Phase 2 has been a theme in this blog since its inception. This year, I was asked to write about it for CA Magazine, the voice of Canada's Chartered Accountants. You can find the article here. In it I list some Phase 2 project ideas to help you get started.

In this blog, I would like to talk about a key Phase 2 relationship - you and your consultant. Most accounting systems are implemented by consultants. They have the technical training to set up the system, import the history and train the staff. If you have been live on your system for over a year, you should have someone back for a post-audit. They can take a fresh look at how your staff is using the system and suggest:

  • Features in your current system that are not being used effectively,

  • Features that you have paid for but which have not been implemented,

  • Features that you could use but don't currently have,

  • Software upgrade timing,

  • Procedures that could be streamlined or made more effective, and

  • Answers to questions / problems the staff have but have not voiced.
Depending on the size and complexity of your system, a post-audit can be as quick as two days - one for analysis and one for reporting.


A lot depends on the qualifications and experience of the consultant. If you don't have someone you trust and who knows your business / industry, then your first task should be to find one.

Oh, and if you would like to improve your Excel knowledge, let me recommend Chris Wood (aka Captain Excel).

Wednesday, 17 September 2008

What Makes You Proud of Your Company?

This blog is all about energizing accounting staff by providing them with the best use of their accounting system. You will be a more productive, more effective team member if your tools save you time rather than getting in the way. But, on a deeper level, even the best tools are not enough to motivate you if you're not proud of where you work.

I am proud of the work my employer does in disaster relief both locally and globally. As an accountant, I am particularly proud that we can say:

As always with United Church emergency appeals, 100 percent of all donations received will be committed to support relief and reconstruction work for people in need. There is no administration fee deducted. This is made possible thanks to the generous ongoing support of United Church members to the church’s Mission and Service (M&S) Fund. Contributions to M&S allow the United Church to absorb the staffing and operating costs of processing donations for emergency appeals.

The situation in Haiti and other Caribbean countries is serious. Hurricanes Fay, Gustav, Hanna, and most recently Ike have left as many as one million Haitians homeless and more than 500 dead. Serious flooding was reported in many areas, and the country's agricultural capacity is again weakened.

The Accounting Department is rarely in a position to save lives, but if we can reduce the cost of administration so that more money is available to the people who can, then we have played a valuable part.

Tuesday, 16 September 2008

Practical Tips for Requests For Proposals (RFP's)

Elizabeth Engel at Beaconfire Consulting has some practical advice for companies issuing Requests For Proposals (RFP's). In an earlier post, I argued for reducing the boilerplate that typically goes into RFP's and their responses, but Elizabeth goes a lot further with practical suggestions about the whole process.

Some of Elizabeth's do's and don'ts:

  • DO allow vendors a reasonable amount of time to respond.

  • DON’T send out a 50 page RFP.

  • DON’T forbid vendors to contact you.

  • DO share the questions that one vendor asks with all the vendors who received the RFP.

  • DO focus on your needs and problems, but allow the vendor to propose the solution.

  • DO your homework and narrow the number of vendors to 4-6.

  • DO be realistic about your project time frame.

  • DO be up front about your process and keep your prospective vendors informed.

If you are new to the RFP process, there is an entertaining description of it in the now ended 1099 online magazine (from which the above picture was taken).

Thanks to Jeff Brooks at Merkle for pointing out Elizabeth's blog. Jeff's Donor Power Blog is focussed on not-for-profits, but this advice applies to anyone issuing RFP's.

Thursday, 11 September 2008

Energizing the Staff

If I were to create an EnergizedAccounting award, the first recipient would have to be Julie Kinkaid, a staff member of the Stewardship unit in the United Church of Canada. Charities typically have more worthy projects than funds, so staff have to "do more with less". In an atmosphere where the resources are always being stretched, people need something to re-energize them.

This year, Julie and her team decided to kick off the fall fundraiser with a little pizzazz. She also wanted to emphasize to staff just how the work of the church is funded as well as the rewarding ways the money is used. On the proverbial shoe string budget, she organized a week of events, such as a kick off (accompanied by some staff volunteer music), theme days where staff wore a specific colour, a knowledge contest, and a door decorating contest (see pictures). All emphasized the mission.

Just as in the for-profit world, all employees are ambassadors for their company, in the not-for-profit world, all staff are fundraisers. This is not to say that they all actually ask for donations, but they need to actively support the charitable mission and be prepared to talk about it to people they know or meet. What better way to help people reconnect with the mission than having a little fun at the same time?

What I loved about this campaign was that it involved EVERYONE, even the accounting department. The door above was decorated by people in one of the church's program areas. The door below is a virtual door, but real in the sense that it is where the money comes through: it is the workstation in the accounting department where the donations are processed.

Whether you are for-profit or not, the accounting department needs to be recognized and made to feel a part of the organization's mission.

Sunday, 7 September 2008

WOW! Free Microsoft Software

My client was a small association. Their "books" consisted of wide green sheets that recorded all of the transactions. At the end of the year, an external accountant would turn the sheets into financial statements, which would be presented to the Board of Directors several months later. The new Executive Director, Jan, wanted monthly financial statements and a faster year end. We had arranged to meet to discuss her needs, but she called a few days before, all excited.

"Guess what? I just bought our first computer. Oh, and our accounting system as well."

"Which one did you buy?"


That triggered a little discussion about the merits of a spreadsheet as an accounting program. I love Excel, but not for accounting. There is no audit trail. If you change the contents of a cell, no history is kept. It can be made to print invoices and checks, but it is awkward. I reassured Jan that she could get a good entry level accounting package for under $200.

Microsoft changed all that. Now you can get Microsoft Office Accounting Express for free, but please remember that the software is only half the battle. Planning and thoughtful setup of the system will save many hours and dollars later.

What do I mean?

Start by deciding what you want. In Jan's case, she needed financial statements to present to her Board. We polled the Board of Directors on what they wanted in their statements. Most of the Directors said they were happy with what they were getting, but one sent in a detailed response laying out the kind of expense break down he wanted to see. That became our detailed statement. We then subtotalled like accounts to create a summary statement.

Another client wanted to track the component costs of the dolly he was building and selling, so we used his manufacturing plans to determine what accounts to create.

In a nutshell, your accounting system needs to support your reporting needs and business decisions. Start with what you need and work backwards! Find a professional accountant with experience setting up accounting systems to begin with. Later on you may need only a bookkeeper to maintain the system or you may learn to do it all yourself.

What's next?

After system set up, write down your routine. Create some "cheat sheets" for the normal processes such as:
  • Invoicing customers

  • Depositing cash receipts

  • Paying the bills

  • Issuing purchase orders

  • What to do at month end

That way, even if you are sick or on vacation, there is a set of instructions for someone else to follow. Who knows? You may just grow to the point where you can hire someone to take all that administration off your hands!

Thursday, 4 September 2008

Top 50 Accounting Blogs

When I first read the Top 50 Accounting Blogs, I was surprised and delighted that there are enough accounting blogs to merit a top 50 list. To be included in the list was an honour. My thanks to MBA Explorer for taking the time to do the research. MBA Explorer is a web site devoted to helping people choose the best American MBA program for them.

Should accountants be blogging? My answer is an emphatic YES!, but you should also approach the subject cautiously.

In my early years in accounting, our firm produced newsletters. The tax one sticks in my mind, not just because one of the students' jobs was to run them over to client offices personally with each major tax change, but also because it was written by someone whose humour and point of view came across clearly. He injected his personality and experience into his writing. The result was that you felt like you knew the writer and would be comfortable talking to him about tax issues.

That would be my advice to a firm that wanted to start blogging: find someone on staff who is writing already (i.e. they have experience with and even enjoy putting their thoughts down coherently as well as working to a deadline). One of the problems I face is consistently coming up with new material.

If they don't have direct experience with blogging, then start by reading the Top 50! Make some comments on the posts. People do read the comments. Also, participating through other people's blogs gives you an entrance into the community. All of the bloggers I have met online have been helpful with the technical points of blogging as well as blog promotion. I get lots of ideas from other blogs.

Before starting a corporate blog, start with a personal blog for a few months, so your writer can get some risk-free experience. I would stay away from an external consultant who offers to write your blog for you. You want the voices of the experts in your company to be heard. Engaging a professional to help you promote your blog or to fit it within the context of your other marketing initiatives is a great idea, however.

Finally, be prepared to start small. Even if all the blog does is initiate a conversation with your existing clients, that alone is worth the effort. If you are already on this path, please leave me a comment about your experiences. At the end of the day, your firm's voice is the voices of its partners, consultants and staff. Blogging will help you get some of those voices heard.

Wednesday, 3 September 2008

Geek Anniversary Gifts

Stuck on what to give your favourite geek for his/her anniversary? Fear not! The internet has the answer:

A big thank you to Beth's Blog: How Nonprofits Can Use Social Media for the link.

Thursday, 21 August 2008

Encouraging Technology Users

Stephen Covey has a wonderful story about teaching his son to take care of the lawn, which I won't spoil here except to say that it was a difficult process and he has to remind himself constantly that the goal was to raise children not grass. That lesson was particularly poignant for me as I was biting my tongue watching my own son mow our lawn. At first we had to come down pretty hard on him even to do that particular chore. There were so many times I wondered if this were worth all the trouble. It would have been much easier just to do it myself. But then one day I noticed that one part of the lawn looked much better. I commented to him about how good it looked. The next time he did a better job of it. Now he is taking some pride in his work. When a bolt loosened and got lost, he took the initiative of fixing it himself.

Encouraging people to use technology is a lot like teaching a boy to mow the lawn: you have to look diligently for things to praise and encourage. At the beginning it will seem like an uphill battle, but you need to be the cheerleader for the new system. Nowhere is this more important than in the accounting department. People guard their spreadsheets! They are very reluctant to leave the proven systems they know to go with something new and untried.

They are not wrong. All of us have experienced or know someone who has been through a computer failure. There are always potholes in the road in an implementation and sometimes those potholes are enough to stop the system in its tracks. We used to say that people are afraid of change, but that has not been my experience. I would say that they are wary of change and the way to deal with their reluctance is to include them in system planning and testing.

As a project manager I know that without full support by senior management, any project is destined for failure. There has to be someone clearing the obstacles faced by the team, reminding people of the reason for the change and helping them get through it. Of course the consultant is going to cheerlead. After all, that's how consultants make their money. But if the employees' Manager is the one cheering them on, they will listen.

In case cheerleading is not a subject you ever took in college, here are a few tips:

  • Get in there with them - My teen has taught me that if I don't do it, there's no way he's going to just listen to me telling him what to do. I have to model the behavior. So open the program and use the technology. Let your staff see you struggling with it the same way they are. Do you want to make someone's day? Let them show you how to do something in the new system. Just watch the spring in their step as they leave your office.
  • Don't lose faith - There will be issues. There will be times that the new system won't work as planned. Encourage your staff to keep a log of issues and follow them up with the implementers on a weekly basis. Take the stance that whatever happens, we're not going back.
  • Be patient - People need to feel like they are being heard. Some people will "get it" faster than others. Be patient with the slower ones and look for ways to support them. Maybe they need to sit with someone else and go over how to use the system. Maybe they are worried that something has been forgotten. Experience has taught me to listen to the data entry people's concerns. They are often aware of things that the Controller / Accounting Manager doesn't know about.
  • Be Sincere - If you don't believe in the new system yourself, it will show. It's tough to fake enthusiasm. So, if you have doubts yourself, get the consultant into your office, close the door and put everything on the table.
Change is never easy, but it can be managed. The sooner people can transition from thinking about the system as "theirs" (i.e. the consultant's) to "ours", the better.

Tuesday, 19 August 2008

Less Numbers, More Story

Harry is one of our unit managers. His normally calm, diplomatic voice takes on a sudden energy as he leans across the table and says, "People seem to think that any mission will do. That's just not true."

Harry has a point. Missions have to resonate with the team or they will not motivate them. I have worked for a passionate leader and I really felt the difference. When he announced his vision for the company, he made sure we all knew where we could make a difference. We worked together and supported each other. There was a well defined goal that was just beyond our reach.

Those are all good things, but, as I look back on that experience now, I see it differently. It was not the goal that motivated us, but the story of The Little Company That Could. We saw ourselves as a small Canadian company competing for recognition with our much larger colleagues south of the border. It was the classic David and Goliath story, and we were determined to create a happy ending.

My current company's story is very much in my mind as I put together the book that will become the blueprint for our company's 2009 year. People don't traditionally look to budgets for inspiration, but I am out to change all that. Here's what I'm planning:

  • Less Numbers, More Story - The budget will now include a narrative telling the reader what we are aiming to achieve. The detailed tables broken down by Cost Centre, Account and month that I need to import the budget into the accounting system will be sent to the Appendix. People don't read them anyway.
  • Align with the Organization's Priorities - The accounting system breaks the organization down into units, but the Board sees the operations in terms of their priorities. The budget book will take all of the individual managers' goals and show how they fit into the Board's priorities.
  • Support the Priorities with Graphics - I will use my Microsoft reporting tools to present the plans graphically, just like I promised. The reader will see that we are putting our money where our mouth is.
  • Get More People Involved - Some people view budgeting as a black box: a mysterious process with results that are beyond their control. The budget book will have a section describing the process and talking about how budget adjustments were made. We will ask for more input from the people most affected by the budget and actively seek their buy-in.
  • Use the Technology - Use the Financial Reporting Software rather than Excel for the Budget reports so that changes to the Budget ripple through all the reports, instead of relying on more fragile spreadsheet links. Use Navision (Microsoft Dynamics NAV) to track the original budget separately from subsequent transfers and updates, so that I can show both on financial reports.
There was an excellent demonstration of the power of a story in Drew McLellan's Marketing Minute today. It certainly inspired me.

The public may not be on the edge of their seats when this book is released, but I'm hoping that Harry will be.

Wednesday, 6 August 2008

We're All In This Together

The first accounting system I had to supervise was an IBM product called MAPICS. I was an inexperienced newbie and knew nothing, so I joined a user group. Every couple of months we would meet at someone's office and someone would bring donuts. We would talk about our experiences with the product and try to answer people's questions. I got some excellent advice about how to handle program patches from IBM as well as where to go for programming assistance. Joining the user group was the best $25 I ever spent.

If there is one piece of advice that I can offer to everyone, regardless of the size of your company, your industry or the type of software you use, it's to join a user group. There is no better source of unbiased, practical information than other users of the same software. If there is a feature you would like to see added, getting a group of users together to request the change is the best way to get a developer's attention. If you are looking for trained staff, another user may be able to point you in the right direction. If you want to change your consultant, what better way than to ask for references from other users?

Many user groups are organized by software implementation consulting firms. I have heard these groups dismissed as being no more than upselling by the consultant. Of course consulting firms are interested in selling more software and services, but the ones I know go to great lengths to put useful content into the sessions. They know that providing practical, useful information is the only way they will get users to come back the next time.

Traditionally, however, user groups are started, organized and run by users. Vendors are often invited to make presentations, but user meetings are not about sales. When my Microsoft rep suggested I start a Dynamics NAV (Navision) user group in my area, my first thought was about all the administration of running the group. Then he told me about Dynamic Communities. They take all of the work out of running a user group, so you can concentrate on the meeting content.

All Dynamic Communities does is manage user groups, whether for Dynamics AX (Axapta), GP (Great Plains), NAV (Navision) or CRM. They just need one local person to lead and they will set up a local chapter. They will even give you a list of their members in your area. If you work through your local Microsoft rep, you can get help finding other users. Microsoft will also provide speakers if you give them enough notice. There is a sliding membership fee depending on the size of your business.
The typical local chapter has 10 - 15 members at any given meeting, with larger chapters averaging 30 - 35 members. The typical meeting goes from 10:00 am to 2:00 pm, with a networking lunch. The morning session is usually a formal presentation, with break out sessions after lunch. I asked about the split between technical and accounting members and Bonnie, the Member Services Manager, noted that chapters started by IT Managers tended to have more technical members, where chapters started by accountants had more user members. You need both.

One of the problems with user groups is their small size. A huge advantage of a centralized organization is that it's possible to put on a conference. Dynamics Communities is hosting a 2 day conference (The link is to the NAV conference. The others have similar pages.) in Las Vegas for $499 per person, with optional additional training either before or after the main conference. When you add that to the user forums available at mibuso and Dynamics' webinars, we've come a long way from a box of donuts after work!

Tuesday, 5 August 2008

Exploding Conventional Wisdom

The accountant usually has a feel for what's really going on. My grandfather's accountant, Lloyd Smith, had a client in the construction business. While doing the financial statements, Lloyd realized that some of the projects were losing money. The owner brushed him off. He said he knew all his staff and suppliers. He knew what went into each project. There was no way he could lose money on any of them. Lloyd set out to determine the truth. All of the purchases for a project were stored in an envelope and the labour charges were written on the outside. Lloyd pored over the purchase journal and payroll records to find out exactly what a sample of projects was costing. Sure enough, he was able to prove that some of the projects were indeed losing money. That got the owner's attention and changes were immediately put into place.

That's what I call Business Intelligence. The purpose of BI is to support better business decision making. One of its best uses is to build a case to explode conventional wisdom, those tired explanations (excuses?) for why things are the way they are.

The paper in my file had been photocopied and carried forward so many years that it was almost illegible. It explained why the fuel oil inventory at my client showed as negative. Apparently, the oil was taken out of inventory faster than the purchase records could catch up with it. I used a report writer to look at the ins and outs of fuel oil. The conventional wisdom had to be wrong. January 2nd at the northern Ontario mine site was cold and snowy as the inventory supervisor and I climbed to the top of the storage tank to lower the knotted rope and see just how much oil was in the tank. I'm sure he was swearing at auditors in general and me in particular, but outwardly the man was friendly. The result, however, was significant. The difference between my computer report and what we found in the tank turned out to have been caused by a computer field that was too small to hold the large quantity of oil (measured in liters). It was dropping two decimal places from the calculations. As a result, immediate changes were made to the computer system.

In your company, are you hearing the same explanations over and over as to why sales are below budget? Does something just seem wonky in the direct costs or manufacturing overhead? This is where all that money you spent on technology and training can really pay off. If your spider senses are tingling as you look at the financial statements, go with your gut and delve into the data.

Start with the conventional wisdom, e.g. "sales are down because of the high Canadian dollar". Ask yourself how you could prove that statement true or false. For example, you could determine the actual effect of the change in exchange rates and see if it's significant. You could drill down on sales by product / salesperson / sales territory to see if the effect is across the board or only with a specific item / salesperson / geographic location. Follow your experience, but use the technology to support your results. People are not going to change just because you say so. They will need documented proof. Conventional wisdom is difficult to refute.

When you have your answer, spend a little more time with the technology to make the resulting report easy to read, then show it to the operational people responsible. Better decision making may just be the result.

Friday, 1 August 2008

The Most Advanced Accounting Software on the Planet

"Tally 9.0 has been dubbed the most advanced accounting software on the planet." That claim is obviously more marketing spin than carefully researched fact, but it points to a trap that we so frequently fall into: comparing accounting software as though there were some perfect system against which all others must be measured.

Anyone who knows me will tell you that I'm a Microsoft fan. In my quarter century of accounting, I have spent a decade implementing Dynamics GP (Great Plains) and Dynamics NAV (Navision). But I still wouldn't claim that it's the most advanced accounting software on the planet. The issue is not how advanced it is, but how well it fits the client's needs and budget.

"Unlike other accounting software, Tally accounting software makes sure all data is protected and backed up automatically" (further on in the same article). If someone starts comparing two accounting packages, stop them right there. There is no standardized language in accounting software upon which to base a fair comparison. Two packages may claim to have advanced inventory features, multi-currency, role based security etc. etc., but when you investigate, you find that they have addressed these features in very different ways. Furthermore, there are hidden assumptions included in the words. I would challenge anyone who claimed that their system automatically backs up data. How can their system ensure that backup media are being properly rotated and taken off site? These are both critical aspects to the back up process. The word "automatic" sends up red flags for me, as do the words "easy", "user friendly" and "at the click of a button".

Frankly, we accounting software implementers have done ourselves a lot of harm by raising people's expectations to unrealistic levels about how easy it is to change accounting systems. Yes, the software installs quickly. Yes, everything is menu driven. Yes, the manuals are online and there's an extensive help system. All of those features do not change the fact that accounting is done very differently in different companies, even those in the same industry. The bulk of the time spent in an accounting implementation is in marrying the new system to the company's procedures and requirements, as well as migrating the historical data to the new system, not installing the software. One thing I admire about Microsoft is the way they insist that all customers work with a local firm ("Partner"), so that there is someone familiar with the customer's business environment on the ground to deal with specific issues.

Microsoft actually goes one step further. They design their systems in layers, the top layer being the changes needed to make the software fit the individual client. They don't claim to be the most advanced software on the planet. They claim to provide a set of flexible tools so that you and your Partner can make the system fit your needs.

Tuesday, 29 July 2008

You're Teaching - But Are They Learning?

Last night, at the dojo, John was teaching. John has a radically different way of teaching martial arts. He smiles. He cracks jokes. He took a serious Aikido exercise and called it the "Weeble Wobble" (as in "weebles wobble but they don't fall down"). He encouraged the beginners to get in close. He said that in classical martial arts training, the top students stood in the first row and the lesser students stood in the rows behind them, each learning from the row in front of them. John's comment was that some of the lesson is lost learning that way.

The Sensei of the dojo, George, has a different style. He emphasizes classical Aikido training, where students watch the master closely and "steal" his technique. But even George says that he does more verbal explanations now because some students learn better that way.

I am not comparing the two teachers to say that one has a better style than the other. Quite the opposite. You need both. You need the classical, disciplined approach AND the irreverent, fun approach. They (and others besides) will give you different prisms to view the material through. You will see and retain different things.

My favorite trainer, Kristi, had a bunch of useful techniques she had picked up along the way. She would tell her students, "All those things they taught you about cheating in high school? Forget them! In this class we cheat. Anything you need to get to the right answer is fine. Look over your neighbor's shoulder, consult your notes, ask someone or look it up in the manual." Kristi bribed the students with little chocolates. She would make them get up and stretch. She would hand out "speeding tickets", little yellow cardboard squares that a student could hold up when the trainer was going too fast or too slow. She knew that when the eyes glaze over all learning stops.

I too have done a lot of training. One day, I was complaining to my wife, a teacher, after a particularly disappointing session. She asked me to describe how I trained. She was amazed. "You mean you just stand at the front and talk?" When I protested that I also did a lot of exercises and encouraged questions, she asked, "But what if not all your students are auditory learners?"

It turns out that a lot of research has been done about learning styles since the days when I was in school. We now know that different people learning differently, emphasizing their ears, their eyes or even their fingers. My wife encouraged me to experiment with dividing the class into groups and asking them to present to each other. There's no better way to cement in a lesson than by asking someone to teach it.

So, the next time you hold a team meeting, change things up a little. Get other people to present. Change the format. Throw in a little chocolate and have some fun. Just because we're serious about what we do, doesn't mean that we have to take ourselves seriously.

Friday, 25 July 2008

Brag Bag Now Open!

Chris Brogan, a social media expert, just tweeted about a great concept called the Brag Bag. Every Friday Becky McCray, who runs SmallBizSurvival blog, posts an article encouraging people to add a comment about something they're proud of. Some people talk about personal accomplishments. Some people brag about what friends or co-workers have done. Others just leave a high-5 to the other people who left their comments. The result is an energetic, positive tribute to the human spirit.

Hmm, maybe Becky should consider opening the bag on Monday mornings, when we could all use a little lift.

Accounting is an area with many unsung heros, people who go that extra mile for others, but who often don't get any public recognition, so let's do the same thing. If you have overcome an obstacle, tackled something new or would like to recognize someone else who has, please add a comment to this article and tell the world!
[Edit - Correction per Chris Brogan.]

Monday, 21 July 2008

Security Officer Goes Postal

Today's Toronto Globe and Mail newspaper had this article about a city of San Francisco computer engineer who changed the security passwords on his employer's system. The system still works, but nobody can get in to set up new users, change passwords etc. The man, Terry Childs, is languishing in a local jail with bail set at $5,000,000.

As an accountant, should you care? I do. The accounting system I run is a major user of the computer network. A network security issue is a financial security risk.

My first thought was: breakdown in controls, i.e. segregation of incompatible duties. There should be more than one person with the system password. But then I thought, wait, what if the control system was in place? What if Childs just let himself in late one night, as he would typically do to apply new security patches, and changed the password? If he were in charge of security, it would be quite a normal thing for him to do. The difference is that he didn't notify the other security administration staff of the change.

My next thought was how to design a security system so that this couldn't happen. You would need at least two passwords, neither of which could change the other. Then there would have to be two independent security officers, etc. I checked with the security officer on our system. He said that we have three system administrators, each with a separate admin login and password. Even if one of them changed the password on all three admin accounts, it's still possible to unlock the admin password. Thank you, Microsoft!

But design is only half the issue. Even though our system could recover from a rogue security officer, that doesn't mean that he/she couldn't do a significant amount of damage. Control systems only go so far. They cannot protect you from human feelings and weaknesses. If your security officer does not feel that he/she is part of the team, then you have a major risk regardless of how well your system is designed.

So, who is to blame, the employee or the employer? The newspaper article doesn't shed much light on why Childs was so disgruntled that he would put himself and the whole city of San Francisco at risk, but my experience leads me to point the finger squarely at both. Putting Childs in jail will not correct the problem. Management needs to find out what the problem is and take positive steps to listen to employee concerns, and employees need to find a constructive way to air their grievances. In his own passive-agressive way, Childs has become the most outspoken of the disgruntled employees, but I'll bet you 10 pounds of Ghirardelli chocolate he's not the only one.

P.S. A note on security: one of my clients was doing an upgrade and I saw him logging in as "Bob". I told him that for this work he had to login as Admin. He just smiled and said the Administrator account actually had no system privileges. It was there as a decoy for hackers. The real power was in the Bob account. Lesson learned.

Friday, 18 July 2008

Accounting 501: Be Nimble

The only time my father's employer changed was when his firm merged with another, whereas I have had several employers, including myself. I didn't plan it that way. In fact, I had every intention of staying with my first employer until I retired. But my generation was the one that coined the phrase negative growth, and so many things have happened in my career that I never expected:

  • International accounting firms laying off staff - It was the early 80's, before all of the mergers that turned the Big 8 into the Big 4.

  • Competent managers being counseled out - There was little room in the partnership, and it was either up or out.

  • Prosperous companies stumbling - During the job interview process, it never occurred to me to do a credit check on my employers. In hindsight, I should have.

  • Administration is an economy of scale - When two firms merge, the accounting department is one area where the new owners look for staff reductions.

As accountants, we have some advantages:

  • Transferrable skills - Allowing for regional and industry differences, accounting is pretty much the same the world over, if you keep up to date on your professional development.

  • Close to the truth - You know how well the business is doing. For example, when the owner of a company injected more personal funds to keep it going, I knew long before the other employees that we were in trouble.

Bottom line: be nimble. You have to be ready to change jobs at a moment's notice. Here is some of the hard won advice that I have received along the way.

  1. Update your resume - At least once a year, update your resume, ensure you can contact at least three references and think about what you would like to do if your job ended suddenly. This advice came from a manager who thought he had a secure position until he was told that there was no room for him in the partnership.

  2. Be business driven - If you are seen as being Administration, then you are expendable. If you are seen as being an integral part of Operations or Sales, then your position is much more secure. This advice came from a manager as our company was being reorganized from an independent unit into little more than a sales office.

  3. Specialize - I had a hard time convincing a computer consulting firm that I could go back to consulting after having been a corporate Controller. The advice the partner gave me was pick an industry or a software package, but you have to specialize.

  4. Constant learning - An interview question that lost me a job was, "What was your last professional development course?"

  5. Do the right thing - I have been following the Livent accounting fraud case. The accusation was that the owners, "Drabinsky and Gottlieb operated a kickback scheme with two Livent vendors which siphoned approximately $7 million (Cdn) from the company for their personal benefit". The defense has been trying to prove that the fraud was perpetrated by the company's accountants without the owners' knowledge. Even though there have been no allegations that the accountants made any substantial personal gain from this fraud, clearly their lives and careers have been affected.

I wish I knew how to handle the last point. What do you do if you suspect your employer is defrauding the company? There usually isn't a smoking gun. It's usually more a case of suspicions and trying to understand people's motives. Fraud and incompetence can look very similar in the heat of battle. Of course you should get out of there fast, but the reality is that it can be extraordinarily difficult to find another position quickly. Unless you've learned to be nimble, that is.

Saturday, 12 July 2008

It's MY data, dammit!

The story you are about to read is true. The names have been changed to protect the innocent.

It was Tuesday, July 8, a smoggy day in the metropolis. My name is Joe Friday, and I implement business systems.

Normally accountants are quiet, orderly people, but the Financial Analyst in front of me had more than just a hair out of place. She was spitting mad.

"Those Customer Relationship Management people have ruined my data."

"Just the facts, ma'am. What seems to be the problem?"

"We have duplicate customers all through the system. We should never have let them in. It's an accounting system. CRM is just an add-on."

I promised her I would get right on it, so, taking my morning coffee with me, I made my way over to the sales area. The Sales Manager was having his own problems.

"Turns out each member of the sales team had their individual way of keeping their list of key contacts. The goods ones used our official contact manager, but other guys used Excel or one even had them on 3 by 5 cue cards, just like his grandfather."

"What seems to be the problem, sir?"

"Problem is they don't want to give up their old ways. Different guys recorded the same customer different ways. When we merged the lists we created duplicates. That got Accounting really mad at us. They said we had to use their system, but frankly, all they care about is name and address. We have multiple contacts, the account history and the industry stats to load as well. But that's not the big problem."

"What is the big problem?"

"The big problem is that the sales team don't want to give up 'their' data at all. They're afraid that others will use their contacts or that we'll fire them when we have their stuff."

This wasn't going to be an easy case after all. Who really owns the data? Is it the sales staff who worked so hard to compile it? Is it the Sales Manager, who is responsible for the team's performance? Or is it really Accounting's data, since, after all, the information is going into a CRM add-on to the Accounting System. Stay tuned for the exciting conclusion next . . .

I fast forward the tape to the next installment.

Friday here. The suspects are all together in one room. The time had come to put an end to the data ownership question.

"Listen up. I have interviewed each one of you and looked at all the relevant laws. Nobody owns the data."

Pandemonium erupted. Everyone shouted at once. Accusations flew. Then the door opened and an immediate hush descended on the room. There, standing in the doorway, was none other than the mysterious woman from the corner office.

"My grandfather started this company. I have worked here all my life. I own 85 percent of the shares of this corporation. I own the data."

She entered the room and walked over to the salesperson.

"George, you have a personal relationship with each of your customers. If they sneeze, you're standing there with a kleenex. But when you go on vacation and one of them calls, I don't know what the hell's going on. And I don't like that. Nobody can do your job like you, George. But nobody can do your job at all when you're not here. Got it?"

George nodded. The President moved to the Financial Analyst.

"Grace, you care about the information. Accuracy is your middle name. But you don't bring in a single sale. Not one. You've got to learn to get along with the others. You have to share your toys or we all won't get to keep playing the game. Make sense?"

Grace looked at the floor.

"Okay, Joe. I think they get the picture," she turned to face the group. "Show's over, folks. Back to work."

"That's my line," I said. She winked at me as she left the room.

Tuesday, 8 July 2008

Motivate Your Team

“I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.” In how many MBA classes, inspirational business speeches and management books has this speech by American President, John F. Kennedy been touted as the perfect motivational mission? (Example 1, example 2, example 3).

The latest to cross my desk is an article by Bill Catlette and Richard Hadden called “Motivation through Mission”. Their key concept is, “People don’t perform in an inspired manner without a big time commitment to a compelling cause.”

It’s hard to argue with that, but consider this example. Let’s say you’re the head of an accounting team and looking ahead to 2009. You have the monthly grind of accounting statements and management reporting ahead of you. In addition, there are the budgeting and audit cycles. You are midway through a computer implementation that has been delayed due to problems converting the history, and you have to change the whole General Ledger to the new International Financial Reporting Standards. What is the compelling cause you need to get your people to perform in an inspired manner?

Catlette and Hadden’s response is, “Whether your team competes on the global stage or a three-unit cube farm, they will move faster, get more done, have more fun, and make more money if all hands on deck share a common sense of purpose and direction. Make it your business to see that they get it . . . really get it.”

Forgive my cynicism, but I have seen this all before. I had a client in the insurance industry where all of the rooms had large motivational posters, but the staff plodded through their jobs like zombies. There was no shortage of messaging proclaiming the common purpose. The issue was that there was no buy in from the employees below manager level.

How do you get buy in? How do you motivate someone? The first thing you have to do is pay attention to the emotional conversation in the room. To borrow from Stephen Covey, “Seek first to understand, then to be understood.” Start by abandoning the idea of motivating a whole team and focus on the individuals. Simply put, if you really care about each one of them, they will really care about you. If you pay attention to their agenda, they will pay attention to yours. If you are honest with them, they will eventually be honest with you. I say eventually because it may take them a while to trust you.

This conversation does not have to get too “touchy feely”. It can be limited to the job. You don’t have to take on someone’s personal problems, but you need to address their professional ones. The only way to find out what’s on their mind is to observe them and ask open ended questions. Notice when they come through for you and each other. Encourage them. Ask them what roadblocks they face.

Actually, just the feeling that someone notices and appreciates what you do can be enormously motivational. I was involved in a computer conversion where the old system was a card based “automatic” bookkeeping machine which belonged in the Smithsonian. We couldn’t convert the data. It had to be re-entered. The two women in the data entry department gamely took on this huge task and managed to convert a month’s worth of data every week until it was done. It being an Olympic year, I got some ribbon and those large chocolate coins in foil to make two gold medals, which we presented to them at a staff meeting. Afterwards, I worried that the whole thing had been a little hokey, but my boss said, “Look what they did with the ribbons.” Sure enough, both of them had pinned the medals up prominently in their workstations.

I have written before about being on a little team with big ambitions, and I have to agree with Catlette and Hadden that putting everything you’ve got behind an ambitious project (or a “Big Hairy Audacious Goal" as another consultant calls it) energizes a team. Just make sure they feel like a team first.