Posts

How Churches Can Embrace Modern Finance

How Church Financial Leaders Can Break Their Spreadsheet Habit

/0 Comments/in , /by

Spreadsheets. Used to manage everything from personal activities and budgets to organizational financial activities, the latter of these poses a multitude of dangers for religious organizations who try to manage funds, cash flows, and expenses using them.

The use of spreadsheets is prevalent in finance, but poses a danger, as a majority of spreadsheets contain errors. Worse, the time spent copying, manipulating, and pasting data is time better spent driving the organization’s strategy or focusing on the mission of your religious organization. Today, we’d like to share with you the dangers of spreadsheet gluttony and how to break your religious organization’s spreadsheet habit.

The Pains of Spreadsheet Gluttony

Spreadsheet gluttony is just one of the seven deadly sins of financial management—joining other common pain points like lack of compliance and slothful tracking—but it is often the most painful and risky ones that plagues financial leaders at churches.

Inaccurate Fund Management

When it comes to managing the different funds at your religious organization, your job includes disbursing, recording, and reporting how the church is managing its funds. When you use spreadsheets, however, you can’t guarantee speed or accuracy in doing this, and the distribution of money into different funds and the management of said funds becomes more challenging with growth.

If you can’t manage the funds, you can’t share in detail what you’re doing with parishioners’ money (which we will discuss below) and you risk the tax man’s hammer. An improperly filed Form 990 can result in the loss of tax exempt status. Learn more about the Form 990 here.

Lack of Detail

The biggest pain of spreadsheets is the lack of insights they provide into the numbers. Even if you are an expert at writing formulas and building relationships between data, this is still only scratching the surface of what could really be measured.

Now you may be thinking, “I don’t need all of these bells and whistles,” but when push comes to shove, you have to realize that your parishioners are more taxed than ever and have more choice in where they send their money as well. This means you need to share with parishioners that you are making good use of their money, as well as knowing when to ask for more.

Details matter, and being able to communicate these details efficiently and accurately to stakeholders, parishioners, and institution leaders was one of the biggest challenges we highlighted in our last blog, Three Common Annoyances Faced by Church Financial Teams.

Less Time Focusing on the Mission

It’s unlikely you got into managing the finances at your religious institution for the lucrative paycheck. It’s more likely you joined for the rewarding work and to help more people to find the grace of religion.

When you rely on spreadsheets and other antiquated processes in accounting, you are taking time directly away from this mission. By automating your processes, you can take the time back your time so you can give back more (or recognize the hidden value of wasting time).

Conclusion

An overreliance on spreadsheets is just one warning sign that your church is outgrowing its accounting software. If you are plagued by extended times generating reports, getting information to decision makers, or even buying paper, it’s time to learn about your options.

At rinehimerbaker, we are focused on helping your church, synagogue, or other religious institution to select, implement, and operate accounting software and other complementary applications. We welcome you to download our guide for organizations outgrowing QuickBooks, to take a look at Intacct’s 2017 Buyers Guide to Selecting Accounting Software, and to read the following to learn even more:

How to Identify Performance Obligations under the new Revenue Recognition Standard

ASC 606 Step-by-Step Part 2: Performance Obligations

/0 Comments/in , /by

The effective date for ASC 606 is rapidly approaching, with public companies needing to complete the transition to the new standard by the end of this year, and private companies having just under 18 months to make the move. In today’s deep-dive, we would like to explore in detail the second step of the five-step process: Identifying performance obligations. Read more

Free up your schedule with cloud accounting

How Cloud Accounting Delivers the Hidden Value of Wasting Time

/0 Comments/in , /by

Getting more done in less time and finishing a task early. Doesn’t it sound fabulous? Also too good to be true, perhaps, because there’s always something we can do to with that extra time to be even more productive. But why not take a counter-intuitive approach: use that extra time to do anything but work. You just might get more done in the log-run. Read more

Seven Deadly Sins of Financial Management

Infographic: Seven Deadly Sins of Financial Management

/0 Comments/in , /by

As your business grows, you begin to notice that the challenges of today take a little bit longer to address than they used to. With more growth comes more data, and with more data comes more time needed to complete basic tasks like closing the books each month. Unfortunately, in the wake of growth, too many businesses commit one or more of the following sins that limit visibility and cause business pain.

Related: What to Do When You Realize You’re Outgrowing QuickBooks

Seven Deadly Sins of Financial Management

A recently released infographic took a look at common business practices that hinder growth, especially when you’re outgrowing entry-level accounting software like QuickBooks, noting the following seven sins that finance leaders commit, many of which can slow your business to a grinding halt:

  1. Scattered Business Data: How much harder is it to close the books each month than it was last month or last year? As you grow, you have more financial data being generated each month, and managing this data in spreadsheets or on paper is not a good solution.
  2. Departmental Silos: Did you get that email? How about that invoice—that was sent three weeks ago? Communication between departments can make for a huge drag on company productivity, and for many organizations the best way to connect a multitude of departments is to set up an enterprise social network that cuts down on email strings and puts data in front of the necessary users when and where they need it.
  3. Spreadsheet Gluttony: Did you know that 88% of Spreadsheets have errors? With 89% of companies using spreadsheets for planning budgeting and accounting, a pretty hefty amount of organizations could have a fatal mistake somewhere in their books. Learnmore in our recent article, “Don’t Rely on Spreadsheets and Luck—There’s a Better Way.”
  4. Slothful Tracking: Another deadly sin is one that affects more than just finance. When an organization uses laborious manual processes for expense management, they are only managing and measuring, not optimizing. By moving expense management to the cloud, you could see cost savings of over 20% or more.
  5. Stale Financial Data: With so many manual processes in place, data not only takes forever to gather, it is inaccurate and has a short shelf life. Companies looking to overcome this should take a proactive stance, seeking a forward-looking system that can calculate information when you need it, where you need it, and based on the drivers you want.
  6. Lack of Compliance: With new ASC Revenue Recognition standards on the horizon, as well as increasing scrutiny into the numbers from customers and investors, compliance is a necessity moving forward—and spreadsheets can’t cut it.
  7. Antiquated Technology: Many of the solutions available to growing businesses were designed before the dawn of the internet, not for the modern needs of the modern business. Without forward-thinking technology, your organization is stuck in the past and unable to focus on technology.

See the Entire Infographic

The following infographic shares more about how you can gain absolution for these sins, so that you don’t end up in accounting hell (or worse—jail).

Related: Three Reasons Your Accounting Team Wants Intacct

Seven Deadly Sins of Financial Management

Gain Absolution with Modern Accounting

If you want to fight off expense tracking sloth, spreadsheet gluttony, and more, you need to swallow your pride and understand that it’s not you, it could be your processes or systems. Learn more about taking control of your organizations financial future by downloading the whitepaper, Eliminating the Risks of Spreadsheets in Finance, as well as by perusing the 2017 Buyer’s Guide to Accounting Software.

Ready to learn more? rinehimerbaker has released a new whitepaper for companies outgrowing QuickBooks.

Outgrowing QuickBooks—How to Know It’s Time to Change shares some of the biggest challenges that businesses face when growing, and the opportunities they have to ease growth.

Learn more by reading the first 3 pages of the whitepaper below:

Features to Look For in Accounting Software

Eight Things to Look For in an Accounting Software (Part 1)

/0 Comments/in /by

When you’re outgrowing an entry-level accounting software, you know what you don’t want: The headaches, hassles, and time drains that come from the manual processes and underwhelming functionality. However, as you look toward a new solution, it’s important to know what you do want from your next solution.

In this two-part series, we look to share with you some of the important things you should be looking for in an accounting system built for your business as it grows and matures over the next five, ten, or twenty years. In part one, we will be discussing the importance of a solution built for your industry, why you need to be thinking long-term, how to get the information you need when and where you need it, and how to get the reports you need based on the business drivers you choose.

In part 2, we will be talking about why you need something that’s easy to learn, ready to integrate, ready to help you, and built for the modern business. See Part 2 of What to Look for In Accounting Software here.

1: Industry Focus

For growing businesses, you may have been able to survive at first with a generalized product that could handle the basic needs of your business. But as you continue to grow, you notice that you need the numbers and workflows built around your business—a professional services firm needs effective hours tracking and expense management while a distribution firm needs insightful purchasing and inventory management while a franchise needs multi-entity design.

While there are few niche accounting software options, solutions like Intacct have the focus and resources to design their solutions around your specific industry, thanks in part to their best-of-breed design (focused solely on accounting—plays well with complementing applications), experience in the middle market (nearly two decades), and highly effective product teams who know your industry and its needs.

Add on top a network of partners like us, and you have the design, knowledgeability, and support to use the software to the best of your abilities.

2: Scalability

One of the biggest mistakes that a company can make is to focus too much on the present and ignore the future. It’s why newspapers are failing (sad!) and the term digital disruption is actually a thing—companies ignoring possible changes in the future that ultimately sink them.

However, you should always be thinking growth, and shouldn’t be looking for an accounting system that will only suit you for the next year or two. An accounting software should be with you for at least the next five years and should be able to grow with your business.

Seek out an accounting software that supports your business growth and can prove it—with case studies of businesses sized similarly to you today and where you intend to be in a 5-, 10-, or 15-year period.

3: Immediacy/Automation

One of the first signs that you’re outgrowing your current accounting software is that it’s taking longer and longer to close your book each month and that it’s becoming harder and harder to generate the reports you need in a timely manner.

This is why you need to ditch the spreadsheets, and take full advantage of automation in order to stand tall during a period of growth. A few things you should look for:

  • Real-time GAAP, IFRS, FASB, Sarbanes-Oxley, regulatory, and compliance reports with over 150 included templates that give you the capability to drill down to the transaction level
  • Multiple ledgers (AR, AP, order management, and cash management ledgers) that can process transactions independently without degrading GL performance, and reduce the time it takes to close your books and report on business results
  • Multiple books, such as simultaneously keeping books on an accrual and a cash basis, to allow you to easily report business results to multiple stakeholders based on their needs and report preferences
  • Custom workflows and system access so that you can maintain separation of duties, match an accounting workflow to your organization’s business processes, or provide read-only access to stakeholders like executives and auditors

Learn more about the dangers of spreadsheets and the importance of automation here.

4: Insightful Reporting

As you grow, it’s likely that you have more people to whom you must answer. It also means you can’t be wasting time and money waiting on a third party to code custom reports because of the immensely complex reporting needs of some accounting software or ERP options.

However, thanks to automation and point-and-click reporting in Intacct, you can have answers to questions from sales, customer service, board members, or investors in minutes—not days. Better yet, you can customize these reports based on your business drivers, specific metrics or workflows. Learn more about reporting functionality in Intacct here, or get even deeper understanding of it by reading this data sheet.

Conclusion: Finding What’s Right for Your Business

As an Intacct Partner, rinehimerbaker has the skills you need to learn, implement, and operate your new accounting software in the cloud. Learn more about Intacct, as well as our services for businesses like yours by contacting us.

Intacct Cloud Accounting

2017 Buyer’s Guide to Accounting and Financial Software

/0 Comments/in /by

When you’re looking at new accounting software, it pays to have the best information possible in order to make not just an informed decision, but an educated one. It’s important to look for information from a variety of sources that can allow you to select an accounting software built for your organization—rather than a one-size-fits-none option, a solution not meant to handle your growth, or one that offers the wrong features for your unique business needs.

This is why we would like to share with you one of the most reliable, educational, annual reports on finding and selecting accounting software for the modern age: The 2017 Buyer’s Guide to Accounting and Financial Management Software.

Written by Intacct, this year’s edition provides a plethora of important advice on selecting a modern accounting software built around your unique needs, including how to select a delivery model, how to avoid “cloud in name only” solutions, and a step-by-step guide to evaluating and selecting a solution for your goals.

Introduction: The Modern CFO’s Balancing Act

Financial leaders today balance the need to manage an increasing level of business complexity with the need for speed. You’re expected to keep your eye on multiple entities with multiple regulatory frameworks and multiple currencies. Think that’s complicated? Now add frequent change to the equation. A monthly financial check-in isn’t good enough for today’s CFO. You need the agility to make decisions at a moment’s notice—and those decisions must be based on the real-time financial truth.

Here’s the question. In today’s complicated business climate, is your accounting software helping you grow and compete—or holding you back? This guide will help you understand whether it’s time to make a move. You’ll discover:

  • Why most financial software systems hinder your ability to get good financial information
  • The six key questions you need to ask before considering a move to a cloud-based financial solution
  • Why the process for evaluating software is different for cloud solutions—and the seven things to make sure you’ve got in writing

Get the Full Report: 2017 Buyer’s Guide to Accounting Software

This free guide, written by Intacct, should be one of the first sources you turn to when considering a new accounting software for your business. Learn more about growing and competing in a modern business world by downloading the guide here.

ASC 606 Part 2

A Brief Look Into Revenue Recognition Standards Part 2

/0 Comments/in , /by

It’s hard to sum up the profound effects that the ASC 606/IFRS 15 Revenue Recognition Standard will have on businesses, as the standard affects nearly every department within nearly every business in nearly every industry. If you have a contract with a customer, you will have to make some changes in order to be compliant with the new GAAP, and the deadline is rapidly approaching.

In part one of this two-part series, we introduced you to the basics of the new standard—who it affects, what it changes, and how to learn more. Today, we will be talking about the basics of the five-step revenue recognition process and offer you additional resources to prepare for making the shift.

Five Steps to Revenue Recognition

One of the most important topics of discussion regarding ASC 606/IFRS 15 is the process in which revenue is recognized. The process consists of the following five-step process starting with contract identification and ending with revenue recognition.

Identify Contract(s) with a Customer

In-Depth AnalysisStep 1: Identify Contracts and Thresholds:

A contract is an agreement between two or more parties that creates enforceable rights and obligations. The guidance in this Topic applies to each contract that has been agreed upon with a customer and meets specified criteria. In some cases, this Topic requires an entity to combine contracts and account for them as one contract. This Topic also provides requirements for the accounting for contract modifications. (See paragraphs 606-10-25-1 through 25-13.)

Identify Performance Obligations in the Contract

In-Depth Analysis: Step 2: Identify performance obligations

A contract includes promises to transfer goods or services to a customer. If those goods or services are distinct, the promises are performance obligations and are accounted for separately. A good or service is distinct if the customer can benefit from the good or service on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. (See paragraphs 606-10-25-14 through 25-22.)

Determine the Transaction Price

In-Depth Analysis: Step 3: Determine the Transaction Price

The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price can be a fixed amount of customer consideration, but it may sometimes include variable consideration or consideration in a form other than cash. The transaction price also is adjusted for the effects of the time value of money if the contract includes a significant financing component and for any consideration payable to the customer. If the consideration is variable, an entity estimates the amount of consideration to which it will be entitled in exchange for the promised goods or services. The estimated amount of variable consideration will be included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. (See paragraphs 606-10-32-2 through 32-27.)

Allocate the Transaction Price to the Performance Obligations in a Contract

An entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract. If a standalone selling price is not observable, an entity estimates it. Sometimes, the transaction price includes a discount or a variable amount of consideration that relates entirely to a part of the contract. The requirements specify when an entity allocates the discount or variable consideration to one or more, but not all, performance obligations (or distinct goods or services) in the contract. (See paragraphs 606-10-32-28 through 32-41.)

Recognize the Revenue When (or as) the Entity Satisfies a Performance Obligation

An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer services to a customer). For performance obligations satisfied over time, an entity recognizes revenue over time by selecting an appropriate method for measuring the entity’s progress toward complete satisfaction of that performance obligation. (See paragraphs 606-10-25-23 through 25-30.)

There’s More to Revenue Recognition Than That

The full text of ASC 606 can be found in the FASB Accounting Standards Codification (link to the FASB’s Web site; registration required), and additional guidance is continually announced by FASB/IASB on the topic, with the latest guidance released December 2016: ASU 2016-20, Technical Corrections and Improvements to Update 2014-09, Revenue From Contracts With Customers (issued December 2016).

Are There Gaps In Your Revenue Recognition Process?

As the date rapidly approaches, now is the time to act. Under the new ASC 606 standard, contracts are the basis for how organizations must recognize revenue. This places significant pressure on your accounting system. In addition to handling contract-related data, it must support revenue recognition and allocation, revenue reallocation, and expense amortization.

To determine whether your current software fits these requirements or if gaps exist, ensure it can:

  • Handle revenue allocation, revenue reallocation and expense amortization through configurable templates, not custom scripting.
  • Provide flexibility to select the allocation method based on the type of performance obligation specified in a contract.
  • Easily allow you to configure new types of allocation as your business, its contracts and accounting regulations evolve.

Having the right software in place now can help you avoid headaches later, as nearly all of the software on the market today is ill-equipped to handle the needs of businesses under the new standard, says Brian Sommer of Diginomica:

“For those firms that elect to defer a software upgrade, they might confront 1-2 ugly alternatives . . . develop a custom application to support the new requirements . . . [or] create some makeshift functionality via a combination of CRM, financial package software and spreadsheet tools. Those firms that choose this path might find their RevRec ‘solution’ to be a jumble of potentially risky or temperamental spreadsheets.”

Prepare for ASC 606: Related Resources

ASC 606 Compliance starts with having the right information. Learn more about contract and revenue management software built to handle the needs of your business, be sure to download the following whitepapers, Six Rules for ASC 606 and Why Compliance Can’t Wait, and read up on the following to prepare:

Stay tuned for all of the latest by subscribing to the rinehimerbaker e-newsletter.

How to tell you've outgrown QuickBooks

How to Know When QuickBooks No Longer Makes the Cut

/0 Comments/in , /by

When a business outgrows an entry-level accounting software like QuickBooks, financial decision-makers have a series of realizations, decisions, and questions that will define the way their organization works in the near- and long-term future.

The first realization is often one of the hardest: Realizing that “It’s time.”  For many of us, QuickBooks is like the first apartment we have out of college: affordable, cozy, and humble—essentially a roof over your head. Too quickly, however, that “roof over your head” becomes a constraint. You’re running out of space and you need more from your investment.

When a “Roof Over Your Head” Accounting Software Holds You Back from Growth

Similar to that small apartment, QuickBooks has constraints, namely in the form of theoretical company file size limitations—once the file size reaches 150 MB for Pro and Premiere and 1 GB for Enterprise, or the number of list items in the file exceeds 10,000 (Pro/Premiere) or 100,000 (Enterprise), the software begins to slow down, data gets corrupted, and working in QuickBooks becomes a hassle, according to a QuickBooks support company.

The company goes on to recommend three options—one of which includes starting a brand new company file, a process that includes recreating all of your opening balances and lists.

Even if you do take this “brute force” approach of starting a new company file, it’s likely as a growing business that you’re processing more transactions, paying more employees, and working with more suppliers, meaning that it’s only a matter of time before you have to do this again.

Common Complaints and Why They Occur

Size is just one of the issues that growing organizations face. A survey completed by a Colorado-based QuickBooks support company found that while QuickBooks was regarded for its ease of use and ability to meet basic business needs, business users also found many issues:

  1. Limited reporting
  2. Double entry and keying errors
  3. Generic and impersonal support
  4. Standalone application Lacks integration
  5. Speed

There are many reasons for these issues:

  • The first two of these are generally the result of QuickBooks’ need for you to use Excel for any additional functionality.
  • The lack of personalized support comes from the sheer size and broad focus of the company—85% of the estimated 29.6 million small businesses in the US use
  • The lack of integration comes as a result of many reasons including its original nature as a desktop application (QuickBooks Online has made improvements, but there’s still a long road ahead) and its focus on basic small business accounting (which often doesn’t need other software like that for T&E, Billing, or CRM).
  • Speed is a result of the aforementioned file size issues, as well as the amount of manual processes, lack of integration, and the need of growing businesses for advanced functionality.

Making the Jump: Accounting Software for Every Size

When day-to-day operations become days-to-days, month-end closing takes weeks to complete, and reporting requires a melting pot of applications to complete, it’s time to realize that you’ve made it—you’ve hit the point when congratulations are in order. Your business has become highly successful, but in order to continue this success, it’s time to make a change.

Just as you left your tiny apartment for something bigger that met your needs, so must you make the decision to take the leap to the next step to choose something that can handle your business in its current state. Unlike your apartment, the “next step” will have fewer constraints, even if you grow.

Since 1997, Intacct has been a leading option for growing businesses, and has continued to improve its offering, now providing the same highly-functional, best-of-breed accounting with affordable options for businesses of all sizes—from the emerging small business to the software startup to the pre- and post-IPO public company.

Next Steps

Learn more about what it means for your business when you outgrow QuickBooks, and learn more about how to make the decision by downloading the latest whitepaper on choosing an accounting software for your growing business.

rinehimerbaker has released a new whitepaper for companies outgrowing QuickBooks. Outgrowing QuickBooks—How to Know It’s Time to Change shares the challenges that businesses face when growing, and the opportunities they have to ease growth. Learn more by reading the first 3 pages of the whitepaper below: