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From the September 2005 Issue

It is a pleasure to see how accounting software has evolved to include business management and analytics. Have you recommended that your clients upgrade their systems to include this new capability? Have you seen enough of what is available to know what to recommend? Have you thought about how you can apply this in your practice? You may need to spend some time with vendors to see demonstrations of these tools in order to understand the capabilities. It is very difficult to write about these tools and do them justice.

Leading tax and accounting firm software suppliers like CCH have introduced Practice Driver (to look at your firm’s performance) and Profit Driver (a moneymaking analysis tool to use with your clients). Practice Driver has three main functions: dynamic data mining of all your time and billing data, opportunity analysis of your market, and firm performance assessment. Other analytics tools for firms include the following: Sage Software’s e-Analytics Portal IQ, CSI Financial Analysis CS, and CaseWare Scenarios.

Business management analytics tools for clients include software like CCH Profit Driver. Profit Driver and competitor ACCPAC CFO are based on the DuPont method of business management and are both licensed versions of InMatrix Optimist 3000 from Australia. These products help you analyze key performance areas in a business. Personally, I would not manage a business today without the information this software easily provides. This type of tool can add much value to analysis of your client’s data. Additional analysis tools worth considering for your clients include Sageworks’ ProfitCents, which can be licensed directly from the company, or through alliance relationships such as Intuit’s QuickBooks Premier and above. Another worthwhile tool for client use is the BizBench Financial Benchmarking Software that contains the RMA (Risk Management Associates, formerly Robert Morris Associates) database.

Real timesaving business information comes from the tools for budget planning and reporting. A tried-and-true product line for doing analytics is available from Microsoft Business Solutions with FRx and FRx Forecaster. FRx is the industry-leading financial report writer, and significant new capabilities have been added in the last two version releases. I always recommend the most current version of FRx with any accounting installation. The training that is offered from the vendor is worth the time and money to get the most out of this investment. FRx has some of the best support in the analytics industry. FRx Forecaster is the budgeting solution from this vendor, and it is very capable of modeling budgeting and merger scenarios. The main mid-range competitor that is worth consideration as a budgeting tool is PROPHIX out of Canada. This tool is easy-to-use by end users, and will continue to evolve for even better report writing. As well, Adaptive Planning is a web-based tool for budgeting, forecasting, reporting and analytics. Using any of these products for budgeting is definitely cheaper and faster than doing budgets in spreadsheets. However, most important is the modeling that can be done to help manage the business better.

Many accounting software systems vendors have either built or added on business analytics capabilities. One of the most innovative developments has been created by SAP Business One with its Drag & Relate feature. Seeing this feature is worth the time of sitting through a demonstration. Other vendors like Exact have added a new Business Analytics module that provides excellent insight into both financial and manufacturing management information. Competitor SYSPRO has an analytics module that can help manage across many business performance measurements.

As well, vendors like Blackbaud have brought analytics to the nonprofit accounting industry with its Information Edge product line. The analytics in this product can look at both financial and donor information. Open Systems’ Advanced Information Analyst has exceptionally good Excel analytics to analyze the results in the accounting system with reporting for management. Sage Software has developed its own analytics with the ACCPAC Insights product, and has long provided summary information with digital dashboards in its MAS product lines. Cognos is the recognized leader of high-end analytics, but your client’s company will most likely need to be $200M or larger to justify using a tool like Cognos. In general, you can make money for your firm and for your clients by running analytics tools.

It may take more than one tool to look at all of the important information for your firm or your clients. If you are not using one or more of these software products today, you are definitely missing the easiest way to see what is happening in your firm or in your clients’ businesses.

Mr. Johnston is executive vice president and partner of K2 Enterprises and Network Management Group, Inc. He is a nationally recognized educator, consultant and writer with over 30 years experience in strategic technology planning, systems and network integration, accounting software selection, business development and management, disaster recovery and contingency planning, and process engineering. He can be contacted at RandyJohnston@cpata.com.