The accounting profession is in for a decisive turn with the advent of the next generation of accounting applications. Investors and analysts have the insight and ability to read financial statements and derive the outcome. However, accountants and accounting software such as Adagio Accounting possess more than data at their fingertips. They have critical insights and the ability to integrate information to understand the impact on the organization quickly.
Technology is evolving and changing, and so is the role of accountants in many ways. Developments in cloud-based business software such as Adagio Accounting will dramatically change the contributions of accountants over the coming years. Gone are the days when employees get burdened with evaluating and cross-checking of spreadsheets so that they don't miss something. Moreover, there is no need to hire more people, as AI-driven platforms does away with manual and routine tasks. These platforms become more affordable and sophisticated; organizations will heavily rely on them and act as a critical part of their business strategy.
What does it mean for Accountants?
Instead of updating and capturing data, preparing manual reconciliations and producing reports, the next generation accounting software such as Adagio Accounting step into help accountants streamline and automate many of these tasks. Their role is no longer limited to scrutinizing the records and checking the numbers, but instead helps businesses optimize their financial processes.
Industry experts believe that the next generation of smart companies see intelligent tools such as Adagio Accounting paired with the affordability of cloud-based technology, will change the way accountants work. The new breed of accountants can focus on value-added activities that center around data exploration, trend analysis, and business intelligence with the help of next-generation accounting software.
The Present Scenario:
Having voice calls, live conversations, video calls, and delivering presentations are some of the ways of interacting with clients. These methods are successful when your aim is business development.
The AR Scenario:
Augmented reality is gaining prominence in the accounting industry, as well. Accounting tasks can be enhanced and simplified by integrating AR with the pre-existing accounting software and manual procedures. AR (Augmented Reality) transforms the way you interact with your clients. With the assistance of AR, you can give voice commands to get graphs and project figures on the projector screen. Furthermore, with a swipe of your finger, the content can be changed.
While interacting with the client on a video call, only giving a voice command is enough to project relevant content or access to financial records with offline, online presentation as well.
Preparing Financial Statements:
Dealing with P/L, balance sheets, financial statements, and other reports can be a time-consuming and hectic affair. The possibilities of errors are quite high. Augmented reality can increase the overall efficiency and securely organize the whole process.
While preparing financial statements, accountants take into account journal and ledger entries. The process involves handling an enormous amount of data, scrutinizing data, and entering it in to make statements. There are accounting tools to manage such accounting practices; it can increase efficiency up to a certain level. Chances of inconsistency in data still exist as data visualization is not easily accessible and not well-organized.
AR (Augmented Reality) is capable of addressing data visualization successfully with the help of 2D and 3D format. Instruct the machine by gestures or voice commands to project information on the screen. Easily manage data, no need to type commands, just a finger swipe to extract needed information.
Conducting audits is mandatory in every industry. Technology plays a crucial role, and AR has numerous usages when it comes to auditing.
A team of accounting professionals is formed to do an audit; systemized procedures are in place along with a list of checklists to accomplish the tasks in the most efficient manner possible. In addition to these, government rules, compliance and regulations are also scrutinized.
The auditing scenario is sophisticated and time-consuming, while it's easy to perform internal audits, the external review takes a considerable amount of time.
AR can completely alter the auditing scenario. A predefined set of commands will do all the inspection work, and you can manage the checklist with the help of voice commands.
Accounting software helps to have seamless communication with your employees, whether they are present in a different location or present at the same premise. The integration of AR ensures efficient workflow with a high level of engagement.
The available software solutions allow accountants to share information via chats and video calls, analyze performance, perform calculations, and interact with clients. There is a lot more scope for improvisation.
AR can undoubtedly enhance the decision-making capabilities of employees. With the assistance of AR projections, employees can discuss work in real-time. Communicating with team members in different locations, help organize, project 3D simulations, and analyze data in 3D format.
AR- The Future Solution:
AR is ready to disrupt the future and influence the existing technology. Accounting is an integral part of any organization and expect rapid and transforming developments shortly.
Innovation and agility add value to the organization. Embracing technology such as Adagio Accounting with Visibility, Mobility, and Productivity, streamlines your business processes to nurture your growing business.
A growth-oriented business needs accounting software that can manage vast volumes of data, organizational complexity, and multiple users. If your organization wants to grow and evolve, you should consider the following features.
Accounting software such as Adagio Accounting with multi-dimensional reporting helps you to simplify and streamline your accounting process. Our Software can manage the high-volume transactions seen in mid-market organizations while giving you enhanced and secure access reporting capabilities.
Multi-dimensional reporting provides an opportunity to create customized reports from which you can drill down to find the required information, thereby getting meaningful insights at the click of the mouse. Expenses per department or location revenue per item from a particular customer, income per project, budgets, financial statements and more provide managers, board members, executives, and finance professionals with insightful data.
Dashboards provide a real-time view of an organization's financial performance at a glance, providing timely and useful data like statistics, financial information, charts, KPIs and analytics, graphs, reports, all with hierarchical capabilities. Such real-time information helps your team make strategic business decisions based on the latest data. Information at your fingertips with Adagio Accounting addresses issues and immediately act on opportunities.
Multi-Tenant, Cloud-Based Environment:
Accessibility is the key to your accounting system, so that you can stay connected to the latest financial data from virtually anywhere, anytime. The solution you choose should provide regular and automatic upgrades to give consistent enhancements and fix known issues. At the same time doesn't plague your organization with unproductive downtime. Adagio Cloud is a multi-tenant software solution that is feature-rich and affordable. Look for the software solution with robust features like Adagio Accounting
with continuous data backups, essential security features, and a disaster recovery plan.
Information flowing out of your accounting system efficiently ensures data integrity, saves time, and provides the scpope to analyze your business activity in real-time. Look for a software that has a standard set of CSV or MS Excel-based tools and templates make the task simple. Automated or live integrations can be provided by various sets of tools and processes, eliminating the chances of human error from duplicate data entry. There is a better and hassle-free way of exporting information instead of cumbersome, disparate exports to Excel.
When a business has multiple locations, entities, currencies, things can get complicated. The right type of accounting software makes analyzing financials and collecting data less complicated with the help of reporting and dimensional tagging. Make sure you set your sights on solutions to accommodate and capture information from different entities and locations, all from one place. Also, look for solutions that can record and report transactions in multiple currencies.
Intuitive software makes tasks easier to accomplish. How easy is it to access reports or manage entries and review your work? How does the interface of the tools designed look throughout the entire software; is it easy for training and collaborating? The user interface of Adagio Accounting is the core when it comes to training users to be proficient. Not every user has a vast technical knowledge, and if a software interface is not easy to understand, the user becomes disengaged and ineffective.
Businesses grow, and as they evolve over the years, the accounting software should have the scale-ability and capability needed to meet the changing and growing demands of the industry. Adagio’s modular system allows you to implement the tools to help your business adapt to growth – in an affordable way.
Reports consisting of long lists of numbers are challenging to interpret. Having the ability to translate data into graphical interpretation in the form of pie charts, bar charts, and other illustration formats are very helpful in communicating the current scenario.
Reports are crucial for identifying trends, but a system that can interpret data, produce forecasts, and make statistical analyses can help you make decisions based on facts rather than guesswork. Look for applications with have multiple budgeting capabilities, flexible year-end processes, analytical reporting tools, and efficient controls for managing users.
These are some of the robust and innovative features critical for any accounting department to keep “checks and balances” and be more agile. Adagio Accounting is an accounting software solution where the possibilities are endless.
Revenue recognition and accurate job costing adds to the complexities of construction accounting since typically every project is unique, and the cash flow depends on the nature of the business and the contract. Some jobs take a week, and others take years to complete. Some have upfront payments, and others have payments in installments throughout the project or after completion. Having a proficient team with the power to account and audit during a project is a must to run the business smoothly and help ensure profitability.
Revenue recognition in construction accounting depends on the nature and duration of the job, the expenses allocated, such as labour and materials from various places. Measuring these against revenues received by way of a controlled billing system providing different methods of revenue recognition is the type of detailed control and reporting often required by growing businesses.
The Cash vs Accrual Method
Many contractors like cash method offered in entry level products like QuickBooks for its simplicity, but it can also be the most inaccurate way of revenue recognition. Money is reported as income when received and as an expense when spent. Transactions are recorded only when the money goes in or out of an account therefore, control over the sub-ledger entries and as to which fiscal period or even fiscal year becomes difficult for companies managing long-term projects. There are no Accounts Payable and Accounts Receivable when the Cash Method is used and hence no clear picture of the receivable assets and vendor liabilities. A cost incurred in December 2019 and paid in January 2020 is recorded as an expense for the fiscal year 2020. Likewise, payment received in 2020 for a project completed in 2019 is recorded as revenue in the 2020 Fiscal year. Without careful management, cash accounting can lead to inaccurate reporting of the financial condition of the business.
The Accrual Method
The accrual method includes accounts receivables and payables, and so provides a more accurate perspective on the financial conditions of the company. The firm records revenue or expenses when a transaction occurs rather than when payment is received or made. An invoice billed in 2019 but yet to receive payment will be recorded as a receivable and is accounted for and taxed in the fiscal year of 2019. Likewise, a bill in 2019 is reported and recorded as a liability on the day it's received, even if the payment would be made in 2020. The accrual method can often not be the most reliable method for contractors as it still doesn't precisely account for the unfinished part of the project.
Percentage of Completion Method
The percentage of completion method recognizes revenues and expenses as a portion of the work completed to date. The earned and unearned portions of a job are tracked separately. For example, a project lasting between 2019 and 2020, all costs incurred, and invoices made for the portion of the job completed in 2019 are reported and accounted for the fiscal year 2019. If any payments received for the part of the job to be done in 2020, this is tracked separately and accounted only after finishing that part of the job. The Percentage of Completion Method is the most commonly used for construction businesses due to matching that replicates the project’s timeline.
Completed Contract Method
The completed contract method can be used by contractors only when not exceeding a specific annual revenue and the contract can be completed within a specified period. Here, every expense and income are tracked but are accounted only on completing the project. For example, take a project that is managed between 2019 and 2020, all transactions made in the course of the job are accounted only on completing the project in 2020. This method can be suitable to postpone tax liabilities, but when several contracts finish all at once, there will be an extraordinary increase in revenue. The resulting balance sheet fluctuations can make managing the business challenging.
To make the math simple, let's consider a $100 job that's 30% complete. An upfront payment of $30 is received, and an invoice for another $30 is yet to be paid by the client. $5 in cost has been paid, and a $20 bill from the subcontractor is received. The project was sold with a 50% gross profit.
Gross Profit $25.00
Transactions are accounted for only the received and paid payments.
Gross Profit $35.00
Transactions are accounted for the all the completed and yet to be completed payments.
The Percent of Completion Method
Gross Profit $15.00
The transaction is accounted only for the percentage of the project completed, and the accurate cost is calculated with a 50% profit margin.
Completed Contract Method
Gross Profit $0.00
No transaction is accounted for because the project is not over yet.
Revenue calculation for construction businesses is different than for other businesses. It is therefore imperative to have an accountant who understands construction projects and select an accounting software solution that provides multiple revenue recognition methods. Adagio Construction is one such accounting software, empowering mid-market construction accountants with all the features they need.
Many vertical market software solutions have automated and simplified their customers' unique requirements, including the construction industry. However, the accounting needs remain complex, and the requirements for construction accounting reporting can be challenging compared to other sectors. These businesses are not just going to calculate debits and credits but also need the proper tools and techniques to address their complex accounting needs.
So, whether you are on a quest for a better solution or you already have one you're happy with, make sure you have the means necessary to manage these four critical aspects of construction accounting.
1. Revenue Recognition
Unlike many businesses, the cost and revenue calculations are not easy in the construction industry. Small companies may choose a revenue recognition method referred to as the Cash basis, where the money is counted as income when received and expensed when spent. In the construction world, Cash basis accounting would leave you broke; it's the most ineffective method of accounting for construction because the money received is typically much later than when the money spent.
Sole proprietors, new businesses or businesses with no inventory use the cash basis method for its simplicity; however, most businesses use the Accrual Method. Accrual basis accounting applies the matching principle, matching revenue with expenses in the time in which the income earned and the expenses occurred. This method is more complicated than cash basis accounting but provides a significantly better view of the financial affairs of the business.
Percentage Completion Method recognizes revenue and expenses over a period, considering the percentage of the project completed to date. The deposits on the yet-to-complete part of the job are tracked separately as a liability until earned. This method is preferred to account for long-term projects.
The income isn't reported until the entire job is finished in the Completed Contract Method. Income and expenses are tracked, and invoices are made throughout the contract period. But, the profit is recognized when payments are made towards the project, or once the project is completed.
What should you look for?
Accounting software that solves construction accounting difficulties should have multiple revenue recognition methods for the business to choose from; Adagio Accounting has five revenue recognition methods available.
2. Job Costing
A project can often have many stages of work, many contractors, subcontractors, and several temporary employees. These temporary workforces will work on the project for a day or maybe a week, whenever needed and often don't get paid using your payroll system. It's vital to be able to account for multiple vendors on a job to ensure you have control over allocating the correct budget to the right phase, job and client.
Tracking accurate costs, types of expenses and production activities by project is the key to managing projects efficiently.
Job costing is like General Ledger for a project, tracking cost types, cost activities, and project completion. Cost activities may be associated with different levels or phases of a project, such as roofing, painting. Comparing estimated costs to actual expenses provides insights for future projects and services and helps businesses to ensure ongoing profitability.
What should you look for?
Detailed and project-specific accounting software that manages all associated costs efficiently and with accurate job costing and tracking capabilities.
3. Reporting and Job Tracking
Usually, construction companies deal with multiple projects in different locations at the same time. Tracking every project smoothly and efficiently can be a challenge considering that some projects may take years to finish.
Misplacing a record or failure to report an expense can impact the profitability of the project and also the business. Every single spending on a project should be reported and tracked daily to manage costs as they incur. Active job Tracking systems enable firms to compare actual costs to estimated expenses, providing valuable insights for future projects.
Getting all the expenses to the accounting department as quickly and accurately as possible is vital. Failing to do so results in backlogs, missed opportunities and can impact decision making.
What should you look for?
Solutions that allow a business mobile access to the accounting details and cloud-based reporting can be an added advantage for construction companies feeling the weight of managing their complex needs.
4. Cash Flow Management
When it comes to a construction business, maintaining a positive Cash Flow is vital. According to a U.S. bank study, 82% of businesses fail due to poor cash flow management or poor understanding of how cash flow contributes to a business. Budgeted spending, periodic invoicing, updated payables, updated receivables, and accessing accurate financial reports helps in controlling positive cash flow.
What should you look for?
A software with robust invoicing functions that integrate to accounts receivable and the general ledger.
Tracking cash flow and profit margin in a construction business is often different than in other industries. Comprehensive accounting software with robust revenue recognition and expense tracking methods, made for construction businesses, is essential for you to be a successful contractor.
The demand for meaningful, insightful and accessible reporting is expected of the accountant more and more every year. The profession has become increasingly competitive, and the need to understand future accounting trends and the impact of digitalization is on the rise.
Sophistication & Automation:
The process of manual data entry is slowly diminishing as automation comes to the forefront, providing savings on business production hours. Utility tools that offer automated security processes, document management, dashboard reporting and remote access are all realistic features in accounting solutions. These tools allow for today's finance professionals to spot inefficiencies within the organization and respond quickly.
Big Data & Analytics
The technology used for data entry and record-keeping becomes more robust and agile; business owners globally want their accounting professionals to provide higher value with their predictive analysis and insight, which will be of significant importance moving forward.
The so-called ‘big data’ provides business leaders with volumes of information, as well as analytical insights that can improve decision-making and improve financial health. The shift from how data is used and processed has developed gradually into a role that uses advanced analytics for assistance with regards to crucial future decisions.
Data analytics is vital on the auditing side of the review and decision-making, especially for mid-market and enterprise organizations. The latest accounting packages organize the data in such a way to make it easier to interpret and doubles up as a decision-making tool by management.
We can certainly direct the application to organize and analyze data in such a way to be used to make crucial decisions. Data Analytics is the way ahead, and it’s becoming a huge factor, as a convenient and popular way to analyze accounting data.
Capitalizing The Power Of Cloud
By the year 2026, accounting software for the global market will reach $11.8 billion, as per data compiled by Accounting Today. Digital is the go-to medium. Cloud accounting and software-as-a-service (SaaS) applications with the ability to access data from anywhere are leading this trend.
Cloud Accounting for Small to Mid-size Businesses:
The power of the internet allows for sharing of real-time data. An enormous amount of data gets accessed at a fraction of cost with cloud-based services. As per the "Accounting Age," it is estimated that by 2020, 78% of small businesses will rely on cloud technology, and adoption of cloud solutions will increase moving forward.
It appears for the time being, large-scale firms with lots of data will save by keeping their computing on-premises. Maintaining data on-premises will ultimately change as cloud becomes more localized and competitive.
Outsourcing specific accounting tasks, like EFT (Electronic Funds Transfer), cuts down on the cost, lowering the chances of malpractice or frauds, and most importantly, provides an automated, reliable process that cuts down on unnecessary manual tasks.
A significant trend for organizations is to enhance the fraud monitoring process. An important factor for those businesses who accept credit card payments is the security of your client's payment information. Companies must be PCI-DSS Compliant and ensure their client's credit card details are vaulted and transactions encrypted and tokenized. Offering protection against painful fraudulent activities affects not only the client but also your business merchant license eligibility. The digital workflow or a streamlined process filters out or deletes duplicate payments. Highly secure management tools can be used to process payments and decrease the risk of fraud.
A significant predictor of revenue growth and profitability gets done through customer intelligence, as per data published by PWC’s Financial Services Technology 2020 and Beyond: Embracing disruption. Utilizing technology to scan through the available data will help to provide the right offer at the right time. This, in turn, will help you to develop deeper relationships with your customers and to make better-informed decisions.
CRMs (Customer relationship management systems) helps you to gather all the data to improve your revenue and competitiveness in the industry with the help of the data collected.
Transformation will Inherit the Universe:
Financial professionals and accountants have to embrace technology to future-proof their careers. Administrative tasks have become automated; forward-thinking accountants offer value to the organization through a more consultative role.
For the accountants who have embraced technology, they seize the opportunity with actionable insights and accurate data to make strategic decisions.
Technology has revolutionized the accounting industry. The global business accounting landscape is experiencing an incredible shift toward automation and advancements. You might have encountered this shift already, and if not, it's sure to get your attention sooner than later. Technology won't immediately replace accounting professionals as there will always be a need for a human decision made in the accounting department, however it certainly will provide a quantum leap to get the job done.
Finance professionals are expected to produce much more than just reports on the debits equaling the credits. Finance professionals also need to be hands-on, future-focused, infusing efficiencies while contributing to company profitability. So, are you planning for what lies ahead? If not, this blog will help you get you started.
The sooner you embrace automation, the better for your business. If you are still using outdated accounting software that forces manual processes for your finance administration, you are behind the times. Contemporary accounting software automates manual day-to-day processes, alleviating repetitive processes consuming valuable time, giving the accountant room to focus on compliance, judgment and other high-value tasks.
With most of the processes automated, you have more time to develop a deeper understanding of the organization and help make accurate, strategic growth decisions. Your work is not evaluated by time anymore but by the value of the results. With this advantage, you will be able to invest the time saved from automation into developing new skillsets.
Finger on the global pulse
With an increasing number of entities accepting payment in electronic format, either by EFT, ACH, PAD's or Credit Card, understanding how payments work is vital. Knowing how to manage these payment channels and ensuring your business is compliant makes you a future-ready CPA.
Harness the power of Cloud
Cloud offers excellent advantages for a variety of reasons and many major accounting software companies provide cloud-enabled solutions. Cloud offers better security, disaster recovery, connectivity, and reliability. Understanding which is best for your organization's future is essential. Cloud solutions are the future of accounting software; embracing this trend could make a big difference.
Be more than an accountant
In the last decade, finance professionals have more freedom to implement the best possible tools and services regardless of location. Beyond the usual accounting tasks, finance professionals need to be more than just record keepers; you can do more by providing regular performance reports, business forecasts, KPI's, etc. Accounting professionals are now responsible for delivering meaningful business insight, giving sensible advice on strategic planning and business improvements. This makes you an advisor as well as an accountant — a sure way to be future-ready.
Even the spectacular automation in the accounting industry can't reduce the value of a professional accountant to an organization; it can only enhance it. With technological enhancements, a CPA is a vital part of the organization. Embrace the future of technology to make your service superior.
Softrak was chosen as Top Financial Reporting Solution Provider by CFO Tech Outlook in its July 2018 edition. The article names Adagio as one of CFO Tech’s top 10 financial reporting solutions. CFO Tech Outlook is a US-based print and online magazine with a readership of approximately 50,000 for print, 600,000 for online.
In his interview with CFO Tech Outlook, Andrew Bates spoke about the strengths of Adagio’s financial reporting. “The software also offers a drill-down from a single number on a financial statement all the way to a balanced journal entry and associated source document, such as a PDF of the vendor invoice. With all of the financial information at your fingertips, you are ready to answer those many “quick questions” with “quick answers. At the higher end, Adagio maintains reporting flexibility without the IT complexity.”
Click here to read the full CFO Tech Outlook interview with Andrew Bates.
Softrak recently held its annual Adagio Opportunity Conference. Held in Vancouver earlier this month, the event brought together a large community consisting of Adagio Accounting clients, authorized consultants and software developers. The conference primarily provides training, but also covers informational topics that are of great interest to a finance & accounting office.
One of the most popular sessions was on data security (session titled Security Blocking & Tackling) presented by Ward Blatch of K2E Canada. This session described the vulnerabilities and threats to your company’s private data, and the most effective tools and techniques to protect it. Some interesting statistics presented were as follows:
- 76% of security breaches were financially motivated.
- 17% of breaches were a result of employee error.
- 4% of people will click on any given phishing campaign.
- 58% of victims are categorized as small business.
These stats all reinforce the need for employee education when it comes to securing your company’s sensitive data.
Ward Blatch of K2E Canada also presented a session on Going Paperless. This session covered policy & procedure best practices for moving towards the paperless office, and the technology infrastructure needed for storing and managing documents electronically. One of Softrak’s newest products, Adagio DocStore, is a key element for the efficient and effective management of electronic accounting documents.
Our guests at AOC 2018 enjoyed the information sessions, and the networking with peers and others in the Adagio community. And of course, we all enjoyed the food at the Sheraton Wall Centre Hotel. Thanks to all who attended and participated in this year’s event. Next year, AOC 2019 will be held at in Ottawa from May 28 – 30th, so mark the date on your calendars.
Do you find sometimes that the productivity of your accounting department does not meet your expectations? Do you find that your accounting software doesn’t do what you need it to do, or it doesn’t mirror your operational processes the way one might expect? Do you find that new employees in your department take a long time to get up-to-speed and productive? Quite often, the problem is not your people or your software, but rather an insufficient program for training. I use the word “program” very deliberately. Employees need a series of training sessions, conducted over a protracted period of time, in order to improve proficiency and productivity. People might retain 10% of what they learn in a single training session. They need a training program in order to become proficient.
In a recent survey of accounting firms (2018 K2E Canada Accounting & Bookkeeping Operations and Technology Survey), 69.7% of respondents indicated that they did not have a training budget established. In fact, less than 24% of the respondents were provided an annual training budget. This is not to say that training and professional development does not take place. It does, although for most it is unbudgeted, and the annual spend on professional development and education is less that optimal.
Why is training so overlooked? Some speculate that management views training purely as an expense, rather than as an investment in employees’ career development. If you viewed vehicle maintenance such as an oil change as an unnecessary expense, you would learn pretty quickly that your car’s performance will degrade and the engine will cease up. People understand that they need to spend money to maintain their vehicles in order for it to run reliably.
Softrak is only a couple of weeks away from holding its annual Adagio Opportunity Conference. This conference provides product education and operational best practices for people working in finance & accounting offices that have Adagio. In our experience, we occasionally have users of Adagio Accounting ask us why Adagio doesn’t provide a specific function or capability. Nine times out of ten, Adagio does in fact provide that capability. The user is just unaware of how to enable the function, or how the capability is managed in the software. It is a lack of training that limits how the software is used, and how the operational processes are automated. You drive a Cadillac, but you can’t get it out of first gear.
If you are a manager, I hope you will give some thought to how training is provided for your staff. We all want to do our best and have a healthy level of job satisfaction. Having the right tools and training are important to the development of great employees.
For a list of current Adagio events in your city click here
At Softrak’s recent Adagio Opportunity Conference, Ward Blatch of K2E Canada shared the 5 New Brain Disorders for the Digital Age with our audience. It was hilarious. I didn’t realize at the time that these are real disorders. The article 5 New Brain Disorders was first published in The Week on February 28, 2017, written by Tammy Kennon.
In today’s digital lifestyle, micro-blogs and Internet browsing have shortened our attention spans, reduced our patience, and changed our learning behaviors. This is why you hear pediatricians and educators warn us about limited screen-time for children under 10 years old. New neurological phobias and disorders have emerged, affecting this online generation.
Here are the 5 new digital disorders, paraphrased to accommodate those with shortened attention spans:
Nomophobia or No Mobile Phobia is the irrational fear or panic brought on by separation from one’s phone or tablet. In a recent UK survey, 73% of respondents claimed to have felt panic when they misplaced their smartphone. Of the 73%, 14% of those spiraled from panic to desperation.
Technoference is the interruption or interference in relationships, leisure time and life satisfaction caused by technology. In a recent survey, 40% said they had postponed being intimate with partner because of some pending interaction on their smartphone.
- The Phantom Ring
This phobia refers to the perception that one’s mobile device is ringing, buzzing or pinging when it is not actually doing so. In a recent poll of 320 adults, two-thirds reported experiencing phantom ringing.
Cyberchondria, not to be confused with Hypochondria, refers to people who diagnose their own illness online. This is a serious problem, as those in the medical profession will attest, because online self-diagnosis is fraught with inaccuracies and inconsistencies that incorrectly lead the patient to the rarest and worst-possible afflictions.
- Truman Show Delusion
Taking its name from the 1998 film, The Truman Show, this syndrome refers to the irrational belief that someone is watching (or filming) you. Although this is not caused directly by our smartphones or digital devices, it is exacerbated by the social-media driven, reality-TV obsessed, connected lifestyle that feeds our narcissistic tendencies.
Softrak’s annual Adagio Opportunity Conference brought together a record number of Adagio community members to Toronto May 22-25, 2017. In keeping with AOC 2017’s theme “Share the Knowledge”, Softrak personnel from Customer Service, Marketing, QA, Documentation, R&D, Training and the executive suite helped our resellers and clients improve their Adagio skills over the course of the 4 day event. Developer partners and resellers stepped up to add their expertise to the mix – making the conference a true sharing experience. Special thanks to Phil McLeod, Steve Schwartz, Dan Desautels, Bruce Gardner, Larry Bates, Lars Glimhagen and Vickie Cegliastro for adding their expertise to our conference and making for a very memorable event.
This year we started the conference with a special keynote from Alan Salmon of K2 Enterprises, who has spent more than 30 years providing professional training to accountants on technological topics like Excel. He looked back on the changes he has seen, and the steps he has taken to remain current in an ever-changing profession. Ward Blatch, also from K2, talked to everyone about technology trends that he expects will change some of the work in the accounting department.
Finally on the opening day, we got to showcase some of the R&D we expect to make available by the fall. Front and centre was the announcement of Adagio DocStore, a module that enables attachment and viewing of PDFs to transactions and master files throughout Adagio. Powered by a simple drag-and-drop interface, PDFs can be attached to a transaction at batch entry, and then remain with the transaction as it flows through the other modules in Adagio. This will enable someone working in Ledger to see all the invoices paid by a single check by clicking on the Credit Entry in the bank GL account.
We also previewed a major new upgrade to Adagio OrderEntry which included not only expanded fields and address information, but also many new processing improvements including Notes and Optional Fields at the detail level. Finally, we announced R&D plans to include integrated credit card processing in Adagio before AOC 2018.
After the opening plenary, attendees got to visit with our Adagio Developer Partners in the Exhibitor Laneway: North American Payment Solutions, LNG Management Services, TelPay, North49 Business Solutions, QLAB (PayDirt Payroll), Shadowsafe and SRSoft all had quality time with the attendees showing their Adagio integrated software solutions. At this point the weather had cleared enough to offer exceptional panoramic views from the 360 Restaurant at the top of the CN Tower.
Conference reviews were overwhelmingly positive from the crowd who set a record attendance for AOC 2017. We look forward to welcoming everyone next year about the same time for AOC 2018.
For an owner of a small business, an entry-level accounting product like Quickbooks can minimize the hours needed for bookkeeping. The business owner can set up direct feeds from bank accounts and credit cards. The accounting program can “auto-magically” apply transactions to GL accounts, and can save hours and dollars.
What happens when the small business grows, adds a full-time accountant, and aims to improve its financial reporting?
Sometimes the automation that is designed to make things easy can actually become an obstacle for the accountant. As the software tries to do all the accounting for the transactions as they are read, based on a simple set of rules, the automation can actually apply the amounts incorrectly. It’s easy not to notice the processing error at the time it occurs. The software program’s rules cannot anticipate the situations that invariably arise – situations that accountants are trained to identify and manage. There comes a time when the accountant needs software that enables them to do what they are trained to do. They need the automation to support their processes rather than automation that forces them to manage a process in spreadsheets – outside of the accounting system.
We have designed Adagio Accounting software for accountants. Adagio BankRec allows the accountant to set rules on how transactions should be matched with the accounting entries. For those statement items where no matching accounting entry is found, Adagio BankRec allows the user to create a “Statement Rule” that can allocate a transaction to a specific GL account, Customer or Vendor based on information in the transaction description. The user gets to review all the information in BankRec before any transactions are posted into the accounting system. There are a lot more checks (no pun intended) and balances.
November 4th marked the final travel leg for Softrak’s fall presentation season, with evening flights from Philadelphia to Toronto and onward home to Vancouver. Except for a wild cab ride in Montreal, all the travel was uneventful (as one always hopes!). During the last 12 weeks, we have done trade shows (CPA Canada The ONE Conference, IPBC Annual Conference, GFOA Annual Western Canada Conference), Adagio Academies (Whitehorse, Moncton, Prince George and Thunder Bay), Adagio Open Houses (Montreal, Ottawa, Toronto, Winnipeg, Edmonton, Calgary and Victoria) and presentations (Moncton, Halifax, Montreal, Ottawa, Toronto, Burlington, Mississauga, London, Owen Sound, Winnipeg, Edmonton, Calgary, Victoria, Vancouver and Philadelphia) all wrapped around the Alan Salmon & Associates Accounting Technology Seminar Series.
We have participated in the Accounting Technology Seminar Series for more than 16 years. This whole day event sells out in many cities because of the valuable information from multiple vendors it showcases. Not to mention all those CPE credits for only $50! This year, 16 vendors and 1337 attendees came together in 13 cities. Attendees got to hear about new products and services from the likes of Softrak, Intuit, Sage, e-Courier, HubDoc, Thomson Reuters and Wolters Kluwer amongst others. The broad range of topics, from core computerized accounting to data security and paperless workflow, all resonated with the crowd.
This year, there was more emphasis than ever on the advantages that Cloud deployments bring to the accounting office. There was also increased emphasis on security around data storage and transmission. Ward Blatch, a speaker familiar to AOC attendees, highlighted coming technology changes that will impact our way of computing in the coming years. Perhaps the most interesting for people in the accounting office was the ubiquity of electronic documents and methods of managing them. As before, we expect to have Ward as a keynote speaker at AOC 2017 – May 23-25 in Toronto.
According to a United States Department of Labor study in 2014, jobs in accounting and bookkeeping are expected to decline 8% over the next 10 years (2014 – 2024), while general employment (all occupations) is expected in increase by 7% over this same period. Technology is stated as the primary factor that has caused a decrease in demand for accounting jobs.
Technology and the Internet have changed the processes of the accounting department. The Canadian Payments Association noted that paper cheques represented 87% of payment transactions in 1990, while electronic payments were a mere 13%. By 2010 these statistics were reversed. Paper payments represented 15% of transactions and electronic payments were 85% of transactions.
Computer automation has changed the complexion of finance and accounting. Although software automation has been around for decades, the cost and sophistication have made these tools accessible to even the smallest of businesses. Data entry is still alive and well, although new technologies have significantly reduced the effort. Electronic billing and payment systems have reduced cost while increasing efficiencies. The cost of paper cheques and the postage to mail them have been completely eliminated.
The role of the accountant is now changing in response to computer automation. The role is adapting to that of financial oversight and management support. Today’s CPA is being educated about financial performance monitoring, audit controls, corporate governance and ethics. As the accounting department gains proficiency with its automation systems, the controllership role is able to provide strategic advice in regards to finance, business trends, and the financial performance of the organization. CPAs are quick to spot areas of the business that need attention due to under-performance (or even over-performance).
Does this really happen in small business? Well, yes and no. Small businesses have greater challenges. The personnel in the accounting department need training to upgrade their skills. The controller needs to have the support of management to raise issues that are potentially breeches of business ethics or breeches of governance policies. In small business, this is a serious challenge. It requires the commitment of management to fund training, and support the potential “whistle blower” without impacting the accountant’s career at the company. It also requires that wages are commensurate with the responsibilities of the role. There is a cost to supporting the modern accounting office. For some small business owners, it represents changing the way it perceives the role of the accounting function.
For government regulated industries, this change will be mandated, regardless of the size of business. For small business, it will take time. There is no argument that experienced accountants will continue to be invaluable advisors – and integral to the growth of small businesses.
In a recent TV interview, I was asked whether “Cloud Computing” was just a passing fad or something that businesses should be planning for. I believe that a general move to Cloud-based computing is inevitable.
In 2008, Nicholas Carr wrote a book called The Big Switch: Rewiring the World, from Edison to Google in which he draws a convincing parallel between the rise of power generation in the time of Edison, to the growth of centrally delivered computing today. Long ago, factories had to be built near a power source, or had to construct their own and employ electrical engineers to keep it running. Once Tesla’s alternating current allowed the delivery of power from a generation source to anywhere, people stopped building their own power plants. I believe we will see the same evolution with computing. Why build and maintain your own network, when computing can be delivered on demand to anywhere on the planet?
Softrak started talking about moving Adagio to the Cloud in 2014. As usual, we underestimated the effort that would be involved in the migration, but the platform went to Beta in 2015, and went live on January 1, 2016. We now have 7 organizations hosted on Adagio Cloud, six of whom have migrated from an on-premise deployment of Adagio.
For me, the most interesting usage for Adagio Cloud was a First Nation running Adagio that did not have a local area network between their various administration buildings. They ran independent databases that had to be reconciled each month. However, each workstation had access to the Internet. Moving to Adagio Cloud allowed them to run a fully integrated Adagio setup, configured with departments instead of separate databases. Their monthly reconciliations disappeared. Their accounting is more reliable. And they had no additional infrastructure to be purchased.
Not all Cloud-based implementations will be managed by Softrak. One of our largest Adagio users set up their own private Cloud service, hosted and maintained by a separate company. They have remote access to their centralized accounting from their various offices, and the branches themselves have almost no IT to maintain. Backups and Data Integrity Checks are centrally managed.
Adagio Cloud is economical because resources are shared across many users: the site, hardware and operating system maintenance; the implementation and setup, including the disk storage and computing resource.
I also believe that Adagio Cloud has solved some of the main objections that an accounting department may have about moving to The Cloud:
- Who controls the Data?
- When do I have to do Updates?
- What happens if I decide Cloud is not for me?
I’ll talk about these issues in a future blog post.
Last month, prior to my upcoming road trip, I had to admit defeat and realize the obvious – my waist size was not going to shrink enough in time for me to fit into my "skinny pant" wardrobe for the fall tour. That left me with one pair of already well traveled pants that were definitely not going to survive another 25 flights, hotels, and presentations. It was time to buy a new pair of pants!
Off I went to my favorite store, Harry Rosen's at Oakridge Centre in Vancouver, where Dwayne Wakefield (my regular guy) showed me a selection of pants, of which only one pair were in my size and none of which were in my style. They'd have to be ordered in. "When do you need them?" Dwayne asked.
"You're not going to like the answer." I said. "Saturday, for at least one pair of pants."
"Okay. Come in for the fitting on Thursday and we'll see what we can do."
Thursday evening I arrived at the store. "Where's your wife?" Dwayne asked. He knew she held significant sway when it came to my clothing purchases. "She'll be here in a few minutes," I said.
"Follow me," he said. "I've laid out a few things to help you choose the pants".
On a table in the back of the store were the four pairs of pants I had looked at earlier – this time in a size more likely to close at the waist. But there were other items on the table too – three shirts, three pairs of shoes, three pairs of socks and a jacket.
"I wanted you to see the pants with some clothes you are likely to have. Every man has white and blue shirts in the closet, but I want you to see them with shirt of a more unusual colour. Also, you'll see that the shoes can be formal or casual, to dress the pants up or down. I didn't remember the style of the last jacket I sold you, so I chose another in a slightly darker hue."
"Well," I said. "I bought a red shirt from here a long time ago and wore it exactly once."
"Oh!" was the reply. "There's no benefit to me in selling you clothes you never wear. I want you to wear all the clothes you buy from here".
"Ok", I said, "I'll humour you and try on the jacket." My wife arrived as I was slipping into the jacket and her opening comment was "When do they release the hounds?" I agreed. It looked like I was heading to a British fox hunt.
But Dwayne already had another jacket draped over his arm. "Try this," he said.
"Wow! That looks fantastic on you," was my wife's immediate reaction. I looked in the mirror and had to agree. The cut and colour suited me. I surreptitiously checked the price tag. The price was within my budget. Since I had earlier tried on a lovely jacket that turned out to cost several thousand dollars, I was relieved. While I appreciated the fine fabric and tailoring, the price was well outside my reach. Although I wasn't going to buy new shoes, I was curious and I picked up one of the shoes to have a closer look. It was nice looking and weighed half as much as my other dress shoes - an important consideration for airline weight limits on baggage. Fortunately, airlines are not yet weighing their passengers as they check in and charging for "excess poundage" of the passenger!
"Okay. I'll take the three pairs of pants, the jacket and this pair of shoes. Now, is it possible you can have the pants ready for me on Saturday?"
"Yes. If you'll give me till the end of the day." was the reply.
So here is my extraordinary sales experience - I went to the store looking for one pair of pants, and left with multiple pants (to see me through my added girth phase), a handsome jacket my wife thinks I look great in, and a pair of comfortable dress shoes. Price was never discussed. No discount was asked for or offered. I made the purchase decision and made my own evaluation as to the value of the goods and service offered to me. I did not have to be sold. I only had to be shown the possibilities and I left with a smile on my face.
I hope that all Adagio clients and potential clients enjoy the same collaborative approach when deciding the best "fit" of Adagio modules for their organization with the help of their Adagio Consultant. I hope they never feel that they were "sold" an accounting system, but that they were equal participants in evaluating the value and usefulness of everything we offer. And that they see the relationship with their Adagio Consultant as collaborative and not simply transactional.
Only the customer can evaluate the value of the goods and services on offer.
The pants and jacket were ready for pickup 10 am on Saturday.
When we started to plan our cloud strategy for Adagio, we recognized that the traditional Software as a Service (SaaS) model had disadvantages for the accounting software market. Forcing everyone onto a single shared application meant that updates and upgrades were installed on the vendor’s schedule as opposed to the client’s. It meant that integration with 3rd party applications would be much more limited. It also meant that once you were operating in the cloud, moving back to an on-premise environment would be another costly migration project.
At Softrak, we took a very different approach. Adagio runs in the cloud as a hosted solution. It maintains the same look and feel as an on-premise (or LAN-based) implementation. Click on the Adagio icon on your desktop and Adagio Cloud looks the same as its on-premise counterpart. The biggest advantage is that our customers may schedule the installation of updates and upgrades. This way, we don’t introduce changes to the software in the midst of a customer’s tax audit, or while the customer is trying to close their year-end. The customer is able to get the upgrades installed when there is minimal impact to the business. As far as we know, Adagio is the only cloud accounting product that offers this capability.
In addition to frequent backups in the cloud, Adagio Cloud’s Datacare utility allows our customers to backup their data to a local storage device. The “offsite backup” for their cloud accounting can be in their own office! If there was ever a protracted interruption to internet connectivity, the customer could have its local Adagio consultant install the required accounting modules to a server and quickly get the accounting department back in business. Again, as far as we know, Adagio is the only cloud accounting product that offers this capability. And having the data in your office under your control removes any question about who controls the data.
Unlike most of our competitors, Softrak is committed to maintaining its on-premise offering. We offer both on-premise and cloud, knowing that our customers want the choice. Internet connectivity is a problem in many rural areas of Canada and the United States. We want to provide great accounting software at an affordable price, and we don’t want to force our customers to the cloud if they are not ready.
Do you backup your data regularly? Is your backup on an external drive or cloud server? Do you even have a backup less than a week old?
If you answer “no” to any of these questions, you could have a catastrophic failure waiting to happen.
For one of our Adagio clients, the catastrophic failure came this past week. They were lucky. It could have been much, much worse.
On Friday, October 24 at 4:45 PM, I got an email from the client that said:
“Can you tell me what this is? It showed up in our Adagio folder on October 17, 2014.”
What happened to your files?
All of your files were protected by a strong encryption with RSA-2048 using CryptoWall 2.0.
More information about the encryption keys using RSA-2048 can be found here:http://en.wikipedia.org/wiki/RSA_(cryptosystem)
CryptoWall 2.0 is the second iteration of a Trojan virus that is commonly referred to as ransomware. The virus scans your computer and encrypts personal files on your hard drive and on any mapped network drive. The encrypted files are rendered inaccessible without the key. If you want the key, you have to pay the ransom, typically starting at $500 and going up exponentially the longer you wait. Your options are to either pay the ransom or have a computer security specialist remove the virus and restore a backup of your data that pre-dates the virus infection of your PC.
The Register posted this article http://www.theregister.co.uk/2014/10/23/cryptowall_malvertising_outbreak/ which states that more “than 830,000 victims worldwide have been infected with the malware, a 25 per cent increase in infections since late August when there were 625,000 victims”.
The client had anti-virus software running but it didn’t catch it initially. It somehow managed to get onto their shared drive with all of their accounting data and encrypted every known file type. We believe Adagio’s proprietary file type was the only reason it remained unencrypted. The client was very lucky.
We managed to clean the infected machines and make new backup copies of the Adagio data. The client still lost all the PDF report files and all the MS Office documents stored on that drive. They had a mirrored backup that was basically an image of everything in real time. It was constantly being overwritten and therefore it was infected too. As a result, they didn’t have a proper archived backup. If the Adagio data had been encrypted, they would have had to restore from a backup we had taken on our last visit over a month ago. Could you imagine having to recreate all the work you did for over a month?
Because of this incident, we proposed to the client a number of measures to protect themselves from future attacks. With today’s cloud-based backup options and the ability to automatically schedule tasks in Windows, there’s really no excuse to not have proper backups. It truly is “set it and forget it” technology now. Backup tapes and having to remember to bring drives home or to a safety deposit box are things of the past. But you’d be amazed at how many of our clients do not have a proper backup they can restore. A lot of them may think they do. But very few of them actually test their backups periodically. Even fewer have offsite backups or a backup on a different device not connected to the network or computer.
If you know someone that doesn’t have backups in place, please give them my contact info. We can advise on different options the client can use. And for smaller clients, there are less expensive options that should fit their budget. After all, they pay for insurance right? Backups are insurance for your data, to ensure business continuity when a disaster occurs. Encourage them to put this insurance in place now rather than after a catastrophe, when it’s too late.
Adagio Consultant and Reseller
I predict that by 2017 that businesses will only issue printed checks when an unexpected situation arises that prompts the company to issue a manual check. A small supply of check stock will be on-hand for these one-offs. For regular payables “check runs”, e-payments will be the norm for businesses of all sizes and industries.
Between 2009 and 2012, US statistics show that check clearance volumes dropped an average of 9.2% each year over the 3 year period, and continues to fall at a significant rate. This statistic includes personal and business checks. A dozen years ago, banks used to transport paper checks via aircraft to central clearing centers. The cost and inefficiency led to the Check 21 Act, which allowed banks to use electronic images of checks rather than the actual paper checks. With advancements in payment technologies that enable services like wire transfer, debit payments, PayPal and Bitcoin, electronic payment has now become ubiquitous.
Most major banks and credit unions in North America offer mobile apps that allow consumers to deposit checks by simply taking a picture of the check.
Small businesses that are comfortable with printed checks, and unfamiliar with the new technology for payments, are also grappling with the escalating cost of paper check stock and the rising cost for clearing printed checks through their bank. This is quickly forcing small business owners to reconsider employing e-payments over checks.In 2015, the paper check is still alive, but in a much reduced capacity than it was a decade ago. Ten years from now, a paper check will go the way of the rotary phone. Technology will continue to add convenience and efficiency to business processes such as payments.
While the economy continues to sputter, with concerns about Grexit, bank rates and rising food prices, there are many indicators that things are improving. Housing starts in most large North American cities are up. Car sales continue to exceed 2014 figures in both US and Canada. Year-to-date, the NASDAQ Composite index is up 9.95%.
Is the Accounting Services sector another bright spot? US accounting firm BDO USA reports 26% growth in annual revenue for fiscal 2015 (ended June 30, 2015). Its consulting and advisory practice saw a 51.4% growth. BDO has completed 13 acquisitions since 2012, which has also contributed to its $1.05 billion in annual revenue. Grant Thornton’s Interim 2015 Financial Statements also report a healthy increase in revenue half-way through its fiscal year. The need for accounting, tax prep, and assurance services never go away, regardless of what is happening in the economy.