Understanding the nuts and bolts of accounting: an engineering perspective

Nuts and bolts background

Nuts and bolts background

Understanding the nuts and bolts of accounting: an engineering perspective

I was a latecomer to accounting. I first completed a degree in engineering and only moved to accounting after that.  Almost everyone who heard what I was doing told me how difficult I would find it and that I would struggle to get to grips with it, never having done it before.

However, I actually found it find quite straightforward and not nearly as daunting as I was led to believe. While there’s a lot of jargon that can be off-putting to someone new to accounting, it becomes a bit easier if you try to think of it in terms of processes with inputs and outputs, as an engineering training would encourage.

Let’s start with the inputs.

Understanding your inputs

It’s useful to start by thinking of your accounts as a database of all the various transactions that happen within your business. So the first thing to do is ask what sort of transactions go on in your business – and, funnily enough, the types of transactions are relatively common across most businesses, regardless of industry and sector.

  • Sales – every business sells something to customers. This means that we need to record our sales and we need to have customer records to track what we’re doing for each customer.
  • Purchases – The business will also buy things from suppliers. This means we need to record purchases and we need to have supplier records to track our activity with each supplier.
  • Payment and receipts – Finally, we need to receive and spend money, so we need a way to record these as money in and money out to/from the business.

That gives us three main types of transactions – sales transactions, purchase transaction, and payment/receipt transactions.

Next, we need to think about how to capture and record those transactions – creating the financial records that, ultimately, will become your accounts.

There are a number of ways of setting up and maintaining those records. You can have paper records (traditional but on the decline in the digital age), you can use Excel spreadsheets or you can buy accounting software. Unless your business is very small, it’s better to use accounting software. Most accounting packages will do what we need fairly easily. However, if the software is well designed, it can also give you a lot of other useful information that would be impossible to collate with paper files or Excel files.

Understanding your outputs

Next, we should move to focus on the outputs for the business. What sort of information do we need our accounting records to provide?

  • Business health – we need a measure of how well the business is doing and whether were actually getting a return on our investment (both time and money).
  • Financial reporting – we need reports that will prompt us when actions are necessary; i.e. when to pay a supplier, or when to chase a slow-paying customer.
  • Business performance – finally, we need information that will help us to understand what’s going on in the business and why we’re getting the results we’re seeing.

To understand how well a business is doing we need to know the net worth of the business. The net worth is the difference between what a business has and what that business owes.  Accountants call “what a business has” the assets of the business and they call “what the business owes” the liabilities of the business. So the key report in accounting language is the balance sheet as this lists the assets and the liabilities of the business.

The other thing you will want to understand is where the business is getting money from and where it is spending money. You probably already know that this report is the profit and loss account (we’ll talk about this more in a future blog post). It’s the report that shows how money progressing into, and out of, the business – a vital way of measuring performance.

The need for insightful information

So, we’ve explained the basic nuts and bolts of accounting for you. You now understand the importance of breaking your transactions down into the ‘inputs’ and ‘outputs’ that explain the flow of money through your business.

The next step is to start turning these financial transactions into insightful, useful business information – a topic we’ll cover in the next in this series of blogs.

If you’d like some help to understand your accounting basics, please do get in touch with us and we’ll be happy to help.

Get in touch to arrange a meeting with the AccountsPLUS team 

You’re a start-up: what are the key things you need to know about accounting?

I’ve had several new business owners come to me over the years saying, “We’re a small start-up, but nobody tells us what we really need to know about accounts”.

If this is the situation in which you find yourself, you’ve probably gone into business because you had a great idea or a valuable skill to exploit – not to spend hours looking at numbers and spreadsheets.

And because you’re not trained in accounting, at times you haven’t ticked the right tax and compliance boxes along the way: but no one shared this with you until it was too late.

Many times it’s because you didn’t know you had to do it, or because there was simply too much information to process and understand.  Maybe you just got too focussed on developing the product or service.

However, none of those is an excuse that will carry much weight in terms of compliance – you’ll still be obliged to pay penalties, and other problems may occur down the line.

So, it’s best to get up to speed with your financial responsibilities from the beginning. Here are a few ways you can do this.

Question mark heap on table concept for confusion, question or solution

Your accounting and tax requirements

The easiest way to do this is to work with a business adviser who can explain and demystify the financial processes for you.

We’ve broken down the accounting fundamentals into three key levels, each of which will help you to not only grow and prosper your business, but stay compliant and, best of all, worry-free.

No Offences – for the brand new start-up

At the starting point, you need the absolute basics done well and the comfort of knowing you’re ticking that accounting and tax compliance boxes.

We can, of course, help you with any of these, but whether you do it alone or not,  you should have the basic information you need so that you know what has to be done, at whatever level your business operates.

Here’s what your business needs to take care of, at a minimum:

  • Register your business with the Revenue and Companies Registration Office.
  • Set up a business bank account (or multiple accounts – talk to us if you’re unsure).
  • Basic bookkeeping and invoicing.
  • Produce and file your statutory accounts.
  • File your annual tax return.
  • Review your accounts regularly, and get a report at least every quarter so you can identify potential profit improvements and cost savings

No Surprises – for when you need more control over your finances

As your start-up begins to gain customers and turn a profit (we hope!) you’ll get to a point where you need a better overview of your key numbers.

Your finances will become more complex, and you’ll want to improve the predictability of cash flow, profits and longer-term financial planning.

This is when you need to address the following:

  • Create an annual budget for the business
  • Update your annual budget on a regular basis (a full 12 months is a long time)
  • Set up metrics to measure profit, loss, and performance against those budgets
  • Get a clear overview of your cash-flow situation
  • Create forecasts of future cash flow
  • Ensure you are receiving proactive tax planning
  • Address costs and profitability at a deeper level
  • At a minimum, carry out quarterly reviews of your business and financial performance

No Regrets – for when strategic advice and long-term planning is needed

When your business becomes a more stable and established enterprise, your needs will change. Our experience is that, at this level, you’ll need the best possible advice on profit improvement, strategic planning and creating a business model that’s scalable and expandable in the future.

This is for the truly aspirational business owner. You know your business has even more potential and you don’t want to look back in the future and think ‘If only we’d done this…’ to secure that future success. So you’re willing to give it a lash and invest that little bit more to make sure you realise the full potential of your business.

At this level, you’ll need:

  • Regular monthly management accounts to keep you and your management team informed so you can make good decisions
  • A long-term strategic plan for the business, with clear goals, milestones, and budgets for each area of the company
  • A real focus on making the business efficient, systemised, scalable and ready for sustained, fast growth
  • Proactive support and advice from your business adviser to help you spot the pitfalls and grab the right opportunities.

Talk to us about improving your accounting basics

Wherever you are on your start-up journey, AccountsPLUS can help you address the accounting and tax fundamentals, and improve your control over your finances.

If you’d like to get your head around all those confusing numbers, do get in touch with us. We’d love to help your start-up become tomorrow’s success story.

Get in touch to arrange a meeting with the AccountsPLUS team 

If you  want to know what returns or filings you have to make for your business, read our post on Reporting/Return obligations.

How to avoid accounting surprises

frustrated man

One issue that often comes up with new clients is the frustration they feel when the accounting results turn out to be significantly different from what they expected.  They may have had a very busy period, worked hard and expected to show good results and, yet, when the accounts are finalised they are disappointed because the results are not as good as they think they should be.

It doesn’t have to be like that.  Other clients are able to predict with reasonable accuracy the accounting results as they come up to the period end.

So what’s different? What is it that the accurate predictor is doing that the inaccurate predictor is not doing.  There are a number of key elements.

Understanding the business

Firstly, the accurate predictor usually has a good understanding of the business and the relationships between the key drivers in the business.  That understanding did not develop overnight – it usually builds up over a period of time.  It can be developed and that development can be accelerated by preparing projections or forecasts and then comparing those projections with the actual outcomes.

Preparing projections can seem difficult at first.  It can be challenging for a business owner to set sales targets, then identify the related costs and finally compile all of those into Profit and Loss and Cashflow projections.  However, the only way to get better at it is to do it.

Identifying KPIs

Once you have the projections complete, you should be much better able to identify your Key Performance Indicators (KPIs).  These are indicators that do either of two things.  They give you feedback on whether you are on track to achieve key targets or they help you predict something that is going to occur.  If you know that you have a very high rework rate on a production line, then you can predict that either you won’t achieve target output or you will achieve it but only by incurring overtime.

Designing informative accounts

Using the insights that you gained from preparing the projections, you should review your accounts and ask yourself if they are providing you with sufficient information to be able to compare results against the projections.  You may want to split sales by product, region or customer type.  You may want to split raw material costs by category or by product or maybe by specific job.  Remember that your accounts are first and foremostt management accounts.  They are yours – to help you run the business and not just for year end.

Ensuring Timely and Reliable Accounts

Accounts are only useful if they are up to date.  You need to have a routine for reviewing the numbers and checking that everything that should be included is included.   For example, are you confident that all the supplier invoices  are recorded for any deliveries that were received and included in stock before period end?  Do you have accurate stock or work in progress counts?  Have you recognised all bad debts or disputed amounts?  Do your payroll figures include the costs of all taxes or are they just the net payments?   One hour per month would be sufficient to complete an accounts review.  Of course, depending on what you find, the accountant or book-keeper may have to put in additional time to investigate any issues that crop up.

Including Non-Accounting Items

There are a number of items that affect your profits that are often not picked up until the year end.  These can include write-offs, scrap and rework.  Maybe even something like the disposal of an asset such as a truck or van.  If you are aware of these, you should make sure that the accountant/book-keeper knows so that they can be reflecting in the numbers during the year and not just at the year end.

If you have a good understanding of your business and the internal dynamics of the business, you will be able to predict your results with a high degree of accuracy.  It takes some work and it takes discipline but it can be done.  One of my favourite quotes is that your accounts should confirm your profit predictions. In other words, there should be no surprises.

If you would like a no-obligation review of your accounting systems and routine, call or email me, Jim Cahill.  My contact details are 086 2323 525 or jim (at) accountsplus (dot) ie.


Six elements that make an excellent finance function

Overview from PeakAs a business advisor, I get to see a lot of different businesses and their finance functions. At one end of the spectrum, the finance function just does the basics i.e processing invoices, managing cash and preparing the core reports. At the other end of the spectrum, the finance function is a key strategic partner to the senior management – whether that be an owner-manager or a full management team. And between those two extremes, there can be a range of options.

In this article, I will set out what I consider to be the key elements that make up an excellent finance function. No matter how the finance function is structured, it is essential that the management team have access to resources to help them understand, interpret and communicate the relevant data needed to support them in keeping the business on track.

In my experience, there are 6 key elements that come together to create an excellent finance function.

The elements

  1. A foundation made up of the core finance systems
  2. Insightful data that can be analysed as needed
  3. An excellent understanding of the business
  4. Outstanding Influencing Skills
  5. A supportive attitude
  6. Responding Resourcefully

1. The Foundation – Core Systems

Firstly, the basics must be in place and must work unnoticed. There will be appropriate systems that process the transactions – sales invoices, purchase invoices, receipts and payments – smoothly and efficiently. Key controls must operate to secure the assets of the business. The basic reports must be readily available within short timeframes. Essentially, we are looking at a lean operation – delivering what the customers of the function need with minimal intervention.

The one thing that can be guaranteed to cause the users of financial information to lose confidence is if the basic information is not reliable.

Pillar 1 – Insightful data designed to deliver required information

Next, consideration should be given to the type of information and analysis that will be useful. The systems should be designed to collect relevant data and be able to report easily on the data. Management should have considered what type of analysis will be required and the finance systems should be designed to capture that key information when the core transactions are being created so that the reports are available with minimal extra manipulation.

For example, if a distribution company has a goal of maintaining its sales to multiples while significantly growing its sales to independents, I would expect to be able to be able to quickly pull reports that show how sales are split between multiples and independents. To do that, each customer will be categorised and then finance can easily run a report showing sales by customer category.

Pillar 2 – Understanding the business

An excellent CFO will have a very good understanding of the business and will be always aware of what is happening. To be able to evaluate how events will impact on the profitability and on cash flow, the CFO will intuitively understand the relationships within the business.

For example, if sales in the business are switching from high labour products to low labour products, the CFO will have a sense of the impact of this and this would likely trigger an analysis of the specific impact on headcount enabling the business to respond proactively.

To develop this awareness, the CFO will spend time walking around the business understanding what happens within the business and talking to key people whether that be operators or management. This CFO will have good relationships with the other managers and will keep himself or herself informed of what is going on in the business. I would expect the CFO to run projections a several times a year and then to compare the projections with the outcomes. In this way the CFO will be testing and developing his/her understanding of the business.

Pillar 3 – Outstanding Influence Skills

The third pillar for an excellent finance function is to be able to influence key people. These key people can be management colleagues, direct reports, funders, customers or suppliers. To be a key influencer you must know what is important to the audience and you must be able to communicate simply and clearly.

Pillar 4 – A Supportive Attitude

A great CFO will understand that Finance is a support function and that its role is to help operations and the other departments to deliver the product or service. Because everyone will not have financial acumen, the CFO will be alert for opportunities to help the other functions and to use finance constructively for the benefit of the business.

It is also important to be able to nurture that attitude throughout the finance staff. The CFO can’t do everything and needs to have a like-minded team around him or her so that the CFO can delegate well while focusing on what’s important. This is done by hiring well, by managing well and by being an excellent role model for how an excellent finance professional operates.

The Roof – Responding Resourcefully

When a finance function has the basics right, curates key information, understands the business, operates supportively and is a key influencer, the function can then respond resourcefully for the business by evaluating the events that are happening so that opportunities can be grasped and problems can be anticipated.

It’s probably true to say that for a really great CFO, technical ability is less important than the CFO’s ability to influence strategic discussions with useful analysis of timely, relevant and accurate data. This ability comes from understanding how the business works, understanding what’s important to the business and to the management colleagues and then being able to use that understanding to make a difference to how the business addresses the key issues that it faces.


Having read this article, what are the elements you need to focus on in order to improve your finance function? Why not rate each element as it is in your organisation. Then prioritise the elements you need to work on, preparing a one-page plan with attachments around specific action plans if required.

If you need help developing your one page action plan, feel free to contact me.

Seven Drivers of Highly Engaged Staff

This months Blog Post comes from Mindshop Colleagues Mark Buckland and Wayne Lockhart

In his highly acclaimed book ‘Good to Great’ Jim Collins suggests that employing, leading and managing staff is like taking a bus trip. In doing so he outlined two philosophies related to how business owners get the best out of their people in helping them to achieve their goals.

The first suggests that business owners need to have clear direction as to where they are going and then select (or retain) the people most likely to help them get there. This means that planning related to target markets, sales, marketing, technology, and innovation should take place prior to decisions about who will be the best people to assist in the achievement of set goals.

This would mean that business owners need to decide where the bus is going and then get the right people on the bus to help them get to a prescribed destination. It raises the question that if people join the bus because of where it is going, what happens if you get ten kilometres down the road and need to change direction? It is highly likely that this will create a misalignment between the new direction of the bus and the skills, values, needs and aspirations of the ‘passengers’?

Collin’s extensive research has revealed an alternative strategy used by many successful businesses whereby they first decide who is going to be on the bus and then decide what direction the bus is going to take. In other words the right people will help you determine where you need to go and then help you get there.

This finding supports the belief that if you start with the type of people you need rather than where the business is going, your business will be able to adapt more readily to change. It also reinforces the fact that if you have the wrong people on the bus it won’t matter if you discover the right direction, you still won’t achieve your goals. As Collins states, “great vision without great people is irrelevant”.

Whatever philosophy you subscribe to as a business owner you still need to keep your staff highly engaged or they won’t produce the best possible results. There are seven (7) key elements to such engagement:

Leadership – It doesn’t matter that the direction of the bus changes over time as long as the business is not rudderless (a mixed metaphor) and staff are involved and communicated with in terms of the overall goals and targets of the business. (see Leadership Diagnostic in this issue of XceLerator).

Purpose – Greater meaning and job satisfaction is derived from the belief that our work serves a worthwhile purpose. This is what gives us a sense of achievement.

Recognition and Reward – All staff need their efforts recognised. This may range from a pat on the back to staff award, pay rise or bonus. It is a clear signal that their work is needed, respected and makes a difference.

Opportunity – Staff need to feel that there is opportunity for their progress and development, both formally and informally.

Relationships – These can be both internal and external. The more positive the relationships with our fellow workers and our customers the better we tend to feel about our work.

Job Fulfilment – The work needs to be satisfying and meet their professional, emotional and intellectual needs.

Work-Life Balance – While work is an integral part of their lives, staff need to achieve balance and not feel that other important aspects of their lives are being consistently sacrificed because of their work circumstances.

If your staff are not “on the bus” and are not actively helping you to achieve your goals, you may do well to reflect on the seven key drivers of engagement and assess where you as the leader can improve the workplace dynamic. Mindshop facilitators have particular expertise in identifying productivity blockages and helping businesses to create more productive and rewarding workplaces.

If you have any commments or questions on this post feel free to contact me at jim(at)accountsplus(dot)ie

Getting on top of your to-do’s

I was talking recently with a friend who commented that he doesn’t feel that he is achieving enough. He sat down at the start of the year and made a list of all the things he wanted to get done. This list included ideas for 2 new products and improving his skills. He is half way through the year and he realises he has made about 20% progress.

We talked through the list and his approach to completing the tasks. As we spoke, I made a number of suggestions to him about how he could improve. I think these suggestions will apply to many people so today’s blog post is focussing on tips for improving success at getting on top of your

1. Review how you are spending your time.

The key questions here include

  1. are you working on the important stuff. Stephen Coveys Urgent/Important Matrix is helpful here?
  2. are you doing stuff that would be better done by someone else eg admin tasks?
  3. are you working effectively – do you stop/start items; do you do match your work to the time of the day?

2. Prioritise

I often quote Jim Collins’ phrase “if you have more than 3 priorities, you have none.” The key thing is to identify for top three priorities for now. You should set these for a reasonable horizon – 8 to 12 weeks is a good timeframe. However, it depends on the size of your priorities. Maybe you need to break them down into bite size chunks. So if you have a large project, break it down into elements and decide what elements you want to achieve in the next 8-12 weeks.

3. Work a system

There are a lot of suggestions for systems out there – many of them quite complicated. But they all have a few key components.

  1. Declutter your head – dump all to-dos out of your head and onto paper or some system. Update the dumped list weekly. It can be useful to use a notebook or an app to record new ideas as they occur and save them for processing later. Your list will contain everything and will be big – essentials, nice to dos, sometime items etc. You can sort and process those later. For now, just record them.
  2. Identify your overall priorities for your selected time period keeping in mind that you will have no more than 3 priorities. You will still have day to day things to get done but they tend to look after themselves.
  3. On a weekly basis, schedule your week to allow time to work on your priorities while spending time on your other routine but necessary activities. You may want to work on your priorities for a little time every day or it may make more sense to block out a large amount of time on a single day to work on them. Decide on that at the start of your week. Decide what you really need or want to go done and schedule that. If you haven’t enough time for them all, decide on the priorities and consider if you can outsource etc.
  4. On a daily basis, schedule your day so that you make time for your priorities. Your day will be made up of meetings and calls and work on specific projects. Schedule your day so that you get to work on those tasks at the most appropriate/productive time for you.
  5. Mark off as complete the things you get done. This makes your progress visible and gives a great sense of satisfaction. Review your day and learn from it. Did you achieve all you wanted to achieve? If not, what should you have done differently?

This system can be made to work for you. You won’t stick to it all the time at the start. There will be time when something pops up that sucks you in but as you review the progress you are making with the system and you realise that working the system gets more done, you will find it easier and more natural to adhere to it.

Have you any comments on the above. It would be interesting to hear your comments and to develop a pool of best practice ideas/suggestions.

If you have any questions on this feel free to email me at jim(at)accountsplus(dot)ie.

10 Tips to get the most from Social Media in your business

This blog post comes from Mindshop colleague, Fergal Coleman. Now based in Australia, Fergal has strong Galway connections. His family came from Galway, he worked for CK Electronics for a couple of years and he played for Galway United for a period. Fergal has a IT and Strategy consultancy in Melbourne Symphony3 www.symphony3.com. Over to Fergal –

“What is Social Media?

In simple terms, social media describes the tools people are using to share text, video, images and information online and the networks they are using to connect with each other. It’s the evolution of the internet from a broadcast medium to a massive online conversation where free, easy to use tools, available 24/7, give users the ability to share and spread information (both good and bad) quicker than any other communication channel.

The feeling in the business world about social media tends to be polarised between those who think it’s an enormous waste of time and those who are embracing it in full. Organisations who choose to ignore social media risk being left behind completely, alienating internet savvy customers and future employees in the process. Organisations that jump without strategic thought will waste a lot of time because they have no overall plan and are caught up with the different forms of social media available. Those organisations that have a clear, strategic social media plan will gain enormous competitive advantage by using the right tools to suit their business and target market. While the Social Media tools are simple, aligning them with the organisation can be complex.

Here are 10 tips to consider when developing the social media strategy for your organisation:

1. Use Social Media internally first – Start using social media tools internally to improve communication between team members and your best customers. Collaboration tools include: Wikis, Basecamp HQ, Central Desktop, and Sharepoint. Meeting tools include: Gotomeeting, Webex and Skype. Instant Messaging tools include: MSN, Gmail chat. Cloud computing tools include: Google Apps. Internal social network tools include: Yammer and Salesforce Chatter.

2. Set the ground-rules – Write a social media policy for yourself, your employees and where appropriate for customers and partners. Even if your organisation is not officially using social media, chances are your employees are using social media at work so you need a policy. The policy can be short, but should clearly outline how employees should behave online, what they should and shouldn’t say. You may also need a response guide outlining how you will respond to good and bad comments about your organisation online.

3. Start Listening – Social Media is best described as a series of online conversations. Just like in normal life good conversationalists are great listeners. Listen to what the leading organisations in your field are doing, listen to what your customers are saying online, keep up-to-date with industry blogs. Luckily there are a myriad of tools available to listen including Google Alerts, Socialmention.com, LinkedIn groups, Twitter search and OpenFacebook Search.

4. Identify your target market – As with any communication plan you need to know exactly who you are targeting? Where are they online? How do they communicate? What are they doing online? Why will they listen to and eventually buy from you? You will already know a lot of this about your existing customers. Often sending out a well-structured survey on surveymonkey.com will provide you with more clues as to where and what you should be communicating. Combine this with point 3 and you are on your way.

5. Start responding – When you have listened and understand what people are saying and where they are saying it, start responding on specific industry blogs, joining Twitter discussions, commenting on Youtube, and slideshare.net or starting discussions on LinkedIn. This will give you an understanding of the tone and topics that interest and engage people, and you will start to get noticed by the online influencers in your industry.

6. Create your own initiatives and get others involved – You’ve done the research, now dive in! Choose your tools and set up your initiatives. You will by now have a feel for which tools, initiatives and type of content best suit your customers. It could be blogs, discussion forums, linkedin, facebook, slideshare etc etc. Focus on spreading the content that adds the most value to your target market. Ask customers, partners and others that can add further value to contribute a guest post or video. This fosters community and adds value to the people who visit your online community.

7. Measure – Everything online is measureable. Regularly check your analytics to see what is working and not working. Are you achieving your KPIs? Keep doing more of what’s working. If something’s not working change it or stop doing it. See next point.

8. Fail fast – Social media tools are free and quick to set up. The most wasted resource will be the time of you and your team. Once you have a plan for a tool set it up and test it. Find out how much value it can add as quickly as you can. Measure carefully and try different tactics.If it’s not working move on.

9. Syndicate – Connect up the various social media tools so that you only have to create a message once and promote it via all your social media tools and networks. Tools like Hootsuite, Ping.fm, Bit.ly, Tweetdeck and Postling enable you to do this automatically. This ensures you get your message your target audience in multiple places, with little additional effort.

10. Train and educate – Train your team to use the Social Media tools you decide best suit your target market. Train your partners and customers on these tools so they understand how to get the best from the information and value you provide. Oh and finally, train and educate them again, and again and again.

For more info or to contribute your thoughts and case studies on social media visit http://symphony3.centraldesktop.com/framework/”

If you have any comments or questions on this post, feel free to contact me by email jim(at)accountsplus.ie or phone, 086 2323525.

Improving Productivity with Smartphone Apps

On a number of occasions over the past few weeks, I have had discussions with friends and clients about how they use their smartphones. I am getting great use out of mine and would be lost without it. However, others are barely using the capabilities of their phone. So here are some of the features and apps that I find most useful. I am sure they won’t all be of interest to you but I suspect at least one or two will.

Scanning Documents to PDF

This is an app I use regularly. I have an Android phone and I use Camscanner. This essentially takes a photo of a document and converts it to a pdf which I can email or save to cloud storage (Dropbox or Drive). I use it for copying receipts, forms, identification documents and for capturing the flipcharts of meetings. Its a really useful app to have.

To Do Lists

To do lists are great for quickly capturing ideas when you are away from the desk or for reminding yourself about what else is on your list when you get very busy and are in danger of losing sight of your priorities. I was using Wunderlist until recently and I have moved to Trello now. Trello gives me more organisational features.

File Sharing

We all know about Dropbox and Google Drive. I keep some key documents in Dropbox and if I need to send such a document to someone, I can send it straight from the phone. This has come in very handy for me a couple of times. For example, once I was away from the office and got a call from a prospect asking for a copy of a document I had mentioned to them previously. I was able to access the document in the cloud and send it immediately, without having to go back to the office.

Managing Passwords

We all know how important it is to manage passwords for the various programmes, systems and websites that we access now. There are several password managers. I use Keepass on my computer and I save the file to a Dropbox folder. I then use Keepassdroid on my phone to access the same file so I always have my passwords available. Keepass can generate random passwords and can hold the various verification questions that some sites need. Keepass itself is password protected and thats the one password that you do need to remember.
As an aside, you would be amazed at the number of companies that have no passwords or else have the password written on a post it note and stuck to the computer screen. You should have a separate secure password for each key service you use.

Capturing Notes

I use Evernote to capture notes. I have a copy on my computer and on my tablet and on my phone. Once I record my note on any of those, it syncs to the cloud and is available to all the others. I now use this for taking notes at meetings and for lectures/talks. I can attach files or photos and email the note with attachments to any of my contacts. I can also record speech to Evernote (like a dictaphone) and attach the recording to a note. I can search all my notes by keyword which is a huge benefit as this means I no longer have the problem of trying to remember what notepad I wrote a note in. Notes can be organised into folders or by assigning tags to them.

Foreign Exchange Rates

There are a number of apps that will provide you with up to date FX rates. The one I use is XE currency but there are loads of them.

Voice Recording

Another very useful, but easy to forget, app is the Voice Recorder app which is usually standard on the phone. It can be used to record meetings or random thoughts that you might have where you don’t have access to a note pad or you want to participate without having to worry about note-taking.

Cloud Accounting

If you use a Cloud Accounting package like Kashflow or Xero they both have apps for the phone that let you access the data. You will not do your accounts on the app but you will be able to check balances etc.I am not going to mention email or calendar. If you are not using those, you won’t be interested in anything else.In summary, there are two apps that I wouldn’t be without – Evernote and Camscanner.

As always, if you have thoughts or questions on anything in this article, let me know.

What would you change if you looked at your business through the eyes of your customer

fingertips In the poem Advent by Patrick Kavanagh, he mentions “the newness that was in every stale thing when we looked at it as children.”When we look at our business, do we see that newness or have we stopped to notice the stale things. Have we become so used to looking at what’s there, that we don’t think about it any more.

That’s how costs and bad practices creep in and grow.

To counter that we need to find new ways of looking at our business that will give us a different perspective.

Lean thinking can help us. Lean puts the customer to the forefront. So we should look at activities and ask would the customer be willing to pay for this activity. If not, then we should try to remove it. Anything that the customer would not pay for we call waste. So Lean puts a big focus on waste reduction. And by waste reduction, we don’t mean refuse or becoming environmentally conscious. We simply mean reduction activities or costs that the customer would not pay for.

Not all waste can be eliminated. There are some activities that the customer would not want to pay for that we have to do for other reasons, maybe compliance. For example the customer may not want to pay for your annual accounts but your business has to do them.

We need to identify the wastes that can be eliminated without causing problems elsewhere and take action to eliminate those.
So over the next week, start to look at all activities and ask yourself “would the customer be prepared to pay for that?” If not, then ask yourself how can you eliminate it.

PDCA or PDSA – What’s the difference?

I have been thinking recently about PDCA and PDSA.

When I first encountered Business Improvement Theory I learned about the Deming or Shewhart Cycle – usually referred to as PDCA. This is short for Plan-Do-Check-Act. As I understand it, Shewhart first came up with the concept but Deming popularised it.

The theory behind it says that when working on an improvement initiative, we should follow these steps.

Firstly, Plan the action or improvement.

Then, we should implement the plan (D), preferably on a small scale first

Next, we Check how the results compared with expections

Finally, we should Act ie decide whether to adopt the plan, abandon the plan or redo the plan with some change.

In the early days, we talked about PDCA a lot. As time passed, the name of the cycle gradually changed to PDSA where S stands for Study. So the phrase became Plan-Do-Study-Act. I didn’t really know why this happened but PDCA changed to PDSA.

More recently again, I notice that the literature I am working with is referring to PDCA rather than PDSA.

This got me thinking about the differences between the two.

My gut instinct is that I prefer PDSA. The best organisations will extract as much learning as possible from everything they do. PDCA doesn’t capture that philosophy as well as PDSA. For me, Check implies a Yes-No response but Study implies a much richer review or analysis of what happened with a view to learning as much as possible from the exercise. Study also implies that you could glean a lot from something that has not worked as expected, whereas PDCA doesn’t suggest that as much. I think the third step should be about more than just a check to see if you got what you expected.

For those reasons, I am happier thinking about it as PDSA rather than PDCA. Have you any thoughts? If you have send post a comment or send me an email to jim(at)accountsplus(dot)com.