Photo by lonely soul
I came across this interesting site recently, which details how you can extend the life of your inkjet or laser printer by up to 100%.
This can be a huge boost to most businesses, which can spend a significant amount each year on consumables.
Please be warned though, that some of these hacks, whilst legitimate, can void the warranty on your new printer.
Check out the site at: www.fixyourownprinter.com
With the Olympic hoolabaloo now dying out, I found this very interesting link whilst reading the Zoho blogs.
As you know, Zoho is an up and coming provider of web based productivity tools such as spreadsheets and word processing amongst many others.
They have showcased their online database and dashboard tools by creating a custom Olympic dashboard, showing medal tallies in several ways.
Feel free to mosey on down to their site and customise these dashboards to suit. You never know, if you are from one of the smaller countries, you could change the medal weightings to show your country on top of the medal tables!
With the massive surge in online accounting systems over the past two years, I am getting quite a few questions from my clients to explain the various advantages and disadvantages of these system versus the traditional accounting software which is installed on your server or PC.
I will try and provide a neutral analysis of both systems in this post, and hopefully give you enough information to make an informed decision. I will also try to refrain from naming specific software vendors unless absolutely necessary.
Disclaimer: My business currently sells and supports installable accounting software, but we also are in the process of developing online accounting software solutions for our clients.
This is the style that most business people are familiar with. You either go to a computer store and purchase an accounting system off the shelf, or else you engage a consulting firm to provide you with software, and one of their consultants will descend upon your network with a swathe of CD’s and manuals to install the software for you. At the end of either process, you have at least one, if not more, nice shiny CD’s to safely store away.
If you are really lucky, over the course of the coming months and years, you will regularly get updated CD’s being sent to you in the mail – or else you will keep saying the same abovementioned consultant sneaking around your server on a regular basis.
Doesn’t it give you a nice, comforting feeling – having your own software in your little hands, under your own control? No one else can come in and steal the original programs, and your data…all your data is safely secure on your server down the hall. Only your own immediate staff can get access. Oh happy days…
Or not! In my experience, only about a third of our customers can safely say they have reached this cozy nirvana – and of those, about 75% of them are living precariously close to the edge.
Let’s face it – the average small business does not have a fool proof IT system. We rarely find servers with all the security patches installed, and we routinely find loopholes in firewalls and other ’security’ measure that have been hastily slapped together, or done on a budget.
With the average machine on the internet being sniffed for a hostile attack at least several times a day, are your confident that your server will be safe from all forms of intrusion? What about your trusty staff members? All it would take is for one of them to download an infected email which will unleash a trojan horse or key logging software that can compromise your network passwords or even transmit your precious accounting data externally.
Even your premises – what if the office was destroyed by fire? Would you be thanking your (un)lucky stars that you insisted that all backups and copies of your data were kept within the four (now smouldering) walls at all times?
I dont mean to paint a bleak picture here, or seems that I am pushing you towards an online solution, but in my extensive experience, not many small or medium sized businesses really spend enough on their IT infrastructure to ensure that they have 99.999% uptime or are secure from nearly all hacking attempts.
Too many businesses still have antiquated servers which were ’slapped together by their brother in law who was studying computers at night school 6 years ago’. Don’t trust these sorts of systems to be safe or reliable.
You may find that as you upgrade your business software, you will accordingly have to upgrade your computer hardware to suit. What if the latest version only works on XP and Vista? What happens to all your trusty old Windows98 workstations? What if the new version needs SQL server installed on your network server? Can you increase the memory? Will you have to buy new hard drives to cater for the increasing amounts of data?
Lastly, we see a large number of clients who simply lose their installation CD’s, or else they try and keep them all, and have the wrong versions in the ‘current software’ folder. Very few of our clients actually manage their software installation CD assets well, and we find a lot of time is wasted trying to get all CD’s the match their currently installed setup.
A friend and colleague of mine predicts that we are the last generation of users who will have to run an installation CD. Such is the uptake of online software and services these days.
It sounds great doesn’t it? Zero installation or management headaches. Simply find a PC connected to the internet, fire up a web browser and you can access your data from anywhere in the world!
Sorry to bring you back to reality – but such perfection does not exist…yet. There are still minor issues plaguing some providers which will have to be resolved.
One of these is reliability, and while most online providers can boast 99.999% availability, there are still a few too many incidents of downtime caused by what would seem to be avoidable situations. A case in point is that late last year, a truck smashed into an electrical pole near RackSpace’s headquarters at an undisclosed location. This crash caused a spike in the system which shut down about 25% of RackSpace’s servers.
Now, RackSpace are one of the largest hosting companies in the world, and they host servers for some big name web companies, and this sort of thing should just NOT have happened, what with all the backup generators and secondary power lines going into the building etc., but happen it did. Just like the Titanic was ‘unsinkable’.
In my view, going all on the web still constitute a ’single point of failure’ should the internet go down. Which leads me to my next point – broadband internet reliability, at least in Australia, is still patchy to say the least. Nearly every major carrier here has regular outages and serious lag times on their service from time to time.
If the council cuts a phone cable down the street from your office, could you be without your critical accounting data for a day (or two)? Do you have backup internet connectivity via wireless 3G cards?
Another factor that needs addressing with some online vendors, is there is still too much focus on a particular brand of browser. There are sites which I avoid now because of their insistence on Internet Explorer version 6. Some still dont support Firefox or Opera and other rapidly growing browser types.
Technically, I realise that it is difficult to develop a system which fully supports all browsers currently on the market, but I should think that any online provider worth their salt would make the effort.
One common objection to going with a web based solution that I hear from my clients is: “Oh, but then my precious data will be out there on the internet, and anyone could get to it…”
Ok – valid point. However, most of the top tier online providers have their reputation at stake here. They will usually have spent big dollars in getting their security systems to be almost bulletproof. It would take a determined hacker to get in and steal their data.
“Oh, but what about their internal staff members and network administrators? I don’t know them and don’t know whether to trust them…” is usually the follow up remark to my above reply.
Once again – valid point. At this stage in the proceedings I usually end up offending my client/prospect by stating:
“Nobody CARES about your data or your company. Really. Nobody does. You do, obviously, but the rest of us have our own stuff to worry about…”
Yes, it’s true. Re-read the above paragraph again. You competitor is having more problems reading his OWN data off his OWN server. Why would he expend the time and energy trying to hack into yours? Would a network administrator on the other side of the world really care about your profit and loss report or how many doughnuts you sold to Fred this month?
I acknowledge that security breaches can happen, but rest assured that this is a rarity rather than the norm. I would say that 99.9% of online business are perfectly, boringly safe.
Another big advantage of online systems, is that you never have to worry about upgrades. If there are any improvements to the underlying software – it is usually done seamlessly in the background for you, and the next time you log in, you have all the new features and power available. No paying expensive consultants to come in and install new versions, or have any hassles with data conversions etc.
It’s true though, that you dont have any say in whether you even want the new version. On some occassions, the existing version works just as well for you and you may not want the extra bells and whistles that the vendor is pushing onto you.
A characteristic of online systems, is that they are almost always based on a monthly or yearly subscription rather than an upfront licence cost. You usually pay according to the number of users who will be using the system and sometimes according to the features you wish to use.
Some installed software vendors are going down this route too, so you will always need to do a careful analysis of your return on investment to see which way is better for you.
Cashflow wise, a small monthly payment may be easier on your books, but over the years, you could end up paying a lot more than equivalent up front licensing fees.
As with all business decisions, you will need to weigh up the pros and cons before making the big step, and I certainly hope that I have given you enough information here to be able to make a decision that suits you and your business. Please feel free to share you experiences or suggestions in the comments.
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Would the ability to check your business health on a mobile device make a difference to you? I know it certainly does in my business. I use my Treo Smartphone quite regularly to check in with our CRM and Emails all the time.
But what has frustrated me is the inability of some of our (Australian) financial institutions to offer a mobile interface to their services. I would dearly like to check my bank balance and perhaps even pay a few urgent suppliers while on the road on conference or holiday. Whilst I always carry a laptop and wireless 3G card, it is inconvenient to have to fire it up and login etc. just to make a quick payment or funds transfer.
I noticed this week that ANZ, the bank we use, has finally released a mobile interface, specifically geared towards the Apple iPhone. This was of particular interest to me because on our holidays a couple of weeks back, I actually bought my wife an iPhone 3G to replace her dead Nokia N80. (Note: Thank you to NextByte in Adelaide city who relented and sold me an iPhone outright without a crappy limiting carrier plan!).
Now, for those of you who dont know my wife, she is extremely technophobic. For instance: I knew my wife for 13 years before she sent me an actual email – so you know what we are working with here!
However, as soon as I gave her the iPhone, she was off and away with scarcely a backward look. Before I knew it, she was sending emails and SMS’s all over the place, forwarding email work requests to other team members and generally running our business – all whilst we were driving between country towns in remote South Australia. The interesting thing was that she kept learning new things on the phone by herself, and for once, she was not afraid to push the envelope and experiment.
This got me thinking about the whole iPhone mania that is currently on the airwaves. I believe that Apple have a game changer here with this phone as it has an interface that truly removes the ‘fear factor’ from new users.
This really puts the phone into the hands of (and I say it with all due respect), the ‘everyday’ people out there, rather than us techno geeks who like to play on the bleeding edge.
As more and more people adopt mobile devices and start to push the capabilities, I would like to see more and more business, financial institutions etc. come on board with mobile interfaces to their service. Next step would be for accounting software vendors to bring out mobile interfaces to their software, so that we can check journals, do bank reconciliations and chase tardy debtors from across the globe. My dream would be to run my entire business from a hand held device within the next year or so.
Do you use an online spreadsheet? There are several on the market, with the most popular one being Google Docs – however, most people have avoided using them, because, quite rightly, they just don’t seem to have quite the power to achieve real business results.
Even Google themselves say that their spreadsheet is really only meant for casual home users who want to do simple checkbook balancing or organise a soccer training schedule.
Another player that has been on the market for a while is Zoho. These guys have slowly and quietly built a suite of online applications which I think will take the market by storm in the following year. They recently announced their millionth user signup, and this week, they have announced that their Zoho Sheet, which is an online spreadsheet, now supports macro recording and playback. More importantly, these macros are actually Visual Basic code, which is the same as Excel uses.
Image by mcastellani via Flickr
Technology wise, this is an awesome achievement, and if the Zoho crew can build on this, their software suite will actually be a serious contender against Microsoft’s own Office suite.
Would you try and tow a 40 foot yacht with a small 4 cylinder family car? Conversely, would you drive a Ferrari down to the corner shop to pick up some milk?
It may come as a surprise, but the capabilities and functions of accounting software vary in the same way. It is vitally important that your business operates on the appropriate level of software in order for you to gain the maximum benefit.
What people do not realise is, when it comes to small and medium business accounting systems, there are really 4 distinct levels of software.
These can be something as simple as an Excel spreadsheet on which you keep your expense records, or a very simple Cashbook Manager software that allows you to record income and expenses in a very straightforward ledger style.
Most of these systems are a simple data-in, data-out type which simply collect the data you enter and then provide reports in different breakdowns and sort orders so that you can see where your money is going (or coming in). At the very most, they help you to balance your checkbook and prepare very basic tax reports.
Typical business size: 1 to 4 employees
Typical turnover: < $150K
Typical category: Small, self owned service based business (e.g. plumber, electrician)
These systems are a step up from the above, in that they can also generally let you create invoices, keep track of payments due and create statements for your customers. Some of the more powerful ones will also have some sort of inventory management capacity built in.
The advantage of these systems is usually the level of integration between the different modules – for example, when you create an invoice for your customer, the income is automatically recorded in your general ledger for later profit and loss reporting.
The level is by far the most popular one for most smaller businesses as it helps you to keep track of your customers, suppliers, inventory and ledger/cashbook in one. You may even by lucky and get payroll management in the bundle!
Typical business size: 3 to 10 employees
Typical turnover: $100K – $1M
Typical category: Retail or shop based business, consulting or community service organisations
Now we are getting a little more serious. Some complex businesses such as manufacturers or wholesalers will require a bit more functionality than basic accounting. For instance, they may need some form of Job Costing or Kit Building which is far more elaborate than basic accounting.
These systems are also generally multi user, in that more than one operator can be using them at the same time, and the system will automatically handle situations whereby two users may be trying to do the same thing at the same time (e.g. invoicing).
One common trait of these systems is that they generally run on an SQL based database as the underlying data store (more on this below).
Typical business profile: 10 to 100 employees
Typical turnover: $500K – $10M
Typical category: Large retailer, manufacturer or wholesaler
We are now in the domain of much larger businesses. ERP (Enterprise Resource Planning) and SCM (Supply Chain Management) are generally terms used by very large companies who may have several offices in scattered locations, and many hundreds of staff members.
This level of the market is generally outside the scope of this blog, but there are plenty of resources available on the web which discuss this software.
Typical business profile: 100+ employees
Typical turnover: $10M+
Typical category: Mining, Finance, Transport, Health
Now that you understand the distinct levels of software, you can see which profile your company matches above. Note that the figures above are simply a guide, and your business may fall into the category above or below the guidelines above. Here are some more important factors to consider:
It is important not just to look at where you business is today, but where you are going in the next few years. If you just wanted to be a one man band and keep a small client base and turnover, then a simple cashbook system may be all you ever need.
However, if you are thinking of building the next GE or IBM, then you will need to carefully consider your software growth path. This may of course mean starting out with a simple accounting system now, and moving up to a full blown ERP system within 5 years.
If this is the case, you certainly don’t want to be re-entering data into newer and bigger accounting systems every 12 months. You will need to evaluate getting a system which is probably a little bit too large for you now, but one that will handle the volumes to expect in 2 to 3 years time. You may also have to consider software vendors that offer different levels of software and more importantly, provide you with a migration path upwards in the future.
Yes, the cost of the software IS important, even if many vendors say it isn’t. What almost all businesses forget, is that it is not just the initial price of purchasing the software, but also the cost of ongoing maintenance and support that has to be factored in.
With a lot of smaller systems, it is usually quite straightforward. You usually buy the package for a fixed cost, along with an initial training package and then you are left on your own after that. With larger systems though, the pricing is quite complex and varies depending on which modules you choose, or how many users need access to the system. There are also usually ongoing maintenance and support fees or contracts which will carry over for the life of the system.
As a general rule of thumb, companies should consider spending about 3 to 8 percent of their turnover on their software infrastructure. This includes the ongoing support and maintenance. As another general rule – for every $1 you spend on the initial software licence fees, expect to pay another $1 to $2 for implementation, training and support.
It is surprising how many businesses don’t consider their hardware infrastructure when selecting their software. A lot of larger accounting systems require you to have a dedicated server, or the latest operating systems. Bear in mind that you may have to do a major hardware replacement & cleanout as part of your new accounting system implementation.
I mentioned before that some of the larger systems operate on SQL databases. This means that you will almost certainly need a dedicated server with a lot of processing power and disk space to handle these sorts of databases. You may also need a consultant database administrator to help you manage and tune your database from time to time.
Apart from computers, you may also need to upgrade or replace your printers and email systems to accommodate the new software. Always be sure that the vendor you are talking to is prepared to spend some time evaluating your current hardware setup and make recommendations to you.
Just as important as which accounting software, you need to know which provider you are going to choose to sell it to you. Remember, you will be building a long term relationship with them, and they will be privy to the innermost working of your business, so trust and integrity and very important factors here.
My recommendation, whilst not scientific, seems to work almost all the time. Go with your gut feeling. You can generally tell very early on at the first meeting whether the people you are talking to are interested in helping you to grow, or whether they are just ‘order takers’ who are just trying to meet their quarterly sales targets.
Set up a meeting with at least 3 different vendors. Some of the larger software companies may have more than one representative in your area, so talk to all of them and see which one is a good fit for you.
Tip: If they talk more about your business than theirs, that is a good sign.
The second thing to look for in a vendor, is a good track record. No two businesses are alike, so you will need someone who can demonstrate a good understanding of yours. Get them to explain to you in plain English terms, just how they are going to solve your business ‘pain points’.
Tip: Don’t be too quick to describe your key problem areas to them – a good consultant should be able to pick up on them by asking you leading questions. However, be sure not to hide any problem areas from them if they miss it – a lot of the time, they will have some very useful ideas on solving them. After all, they may have solved the very same problems for other businesses in the past.
As I have mentioned previously, a good vendor or consultant will look at all aspect of our business when helping you to evaluate what software to implement. This includes hardware, and your staff as well.
Look for a proposal which is careful in detailing exactly what they will (and will not) do. All pricing should be explained clearly, including any ongoing charges. Support and training fees should be clearly explained, including what will be covered in training sessions, number of staff to be trained, and what hours support will be provided.
Do not be afraid to question anything in the proposal that you may not understand. Avoid vendors who try and disguise support charges or have escape clauses which enable them to charge exhorbitant rates at a later stage or if you miss a ‘support’ payment.
Be sure that all parties understand exactly who is responsible for what. Sometime, the task of entering customer and supplier contact details into the new system will be your own responsibility, sometimes the vendor may do it themselves as part of the implementation, and sometime they may import it in from your old system. Be aware of these facts.
This about wraps it up for this particular posting. Please check back on this blog for more information over the coming weeks on traps and pitfalls that can happen when implementing a new accounting system. We are here to provide guidance and the benefit of our experience which stems from over 20 years in this industry.
Please note that we have refrained from mentioning any particular names of software vendors here. We would like you to be assured that our blog is completely neutral and that we do not favour one provider over another when it comes to accounting software. We just want to provide you with enough information to go out there and make an informed choice on your own.
We would appreciate any feedback or ideas that you may have for improvement or future topics in the comments below.
Hi, and welcome to my new blog. My name is Devan Sabaratnam, and I will be your host on here (in addition to some occasional guest postings). I will be using this blog as a vehicle to discuss the most effective ways to run your business using computer software.
I will not be pushing particular software packages or online solutions, but rather I will maintain as neutral a view as possible whilst explaining the pros and cons of doing things in different ways. I have had over 20 years experience in this field, and I hope to use this knowledge to assist you in your business.
Who is this blog written for? Well, broadly speaking, it has been designed for business owners or managers, although software consultants, programmers and accountants will probably get some value from it – or not. If it is the latter, then I hope you will provide some feedback in the comments, or via a guest post so that we can all benefit.
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