I have discovered an addiction people have to a concept…
The concept is all-in-one software.
First, what is all-in-one software?
It is a software suite (usually cloud-based now) that, well, simply, does it all. Basic accounting module, inventory, manufacturing, Customer Relationship Management (CRM), accounts receivable, accounts payable, and more.
Why the heck would you NOT want everything in one place?
We have clients with upwards of 8 separate pieces of software. Each with a separate login.
What? Wait a second…I can hear you say. Are you trying to convince me that 8 separate logins creates more automation than one single sign-on?
I do not believe it, you say.
I will show you how with an example with one area – accounts payable automation.
Follow the Flow
You have a business with 12 locations.
A supplier emails a bill to your document hub software. No human touch.
Software pulls out the amount, the tax, the supplier name, and even the account code.
(**NOTE** here you will likely have an experienced accounting technician checking that everything is coded to the correct account. She will make any coding changes as needed.)
Next, the software publishes it to the accounting software automatically. It attached the bill. No human touch.
Another piece of software looks into your accounting software to route the bill just emailed to the correct department head for approval.
The department head gets an email from the software with bill attached. This person approves the bill with one click.
The software takes that approval and attaches an audit report into the accounting software moving it to “bills to be paid”, along with a copy of the bill and the audit report.
Note that so far this has been one mouse click by a human.
The accounting manager goes into the bill payment software. It sees that the software has auto fetched all the “bills to be paid”, along with the copies of the bills and the approvals (audit reports).
The accounting manager approves the bills for e-signature. (One or two mouse clicks).
The CFO gets notification via email to approve a bill for payment. She clicks “approve” in email.
This audit trail of approvals and e-signatures is recorded in the software.
The software then pays the supplier into their bank account.
Lastly, it records the payment into the accounting software.
Summary of What Just Happened
Okay, what just happened?
The software took care of multiple functions where in the past data entry clerks would have done it. (And done it often very poorly).
The human steps were:
Accounting clerk checked that the document extraction software coded the bill to the correct account
The department head approves the bill for payment (one mouse click)
The Controller and owner each e-signed the payment (two mouse clicks)
The software did this:
Extracted the details on supplier bill
Posted to accounting software
Routed bill via email to department head for approval
Posted approved bill as “ready to pay”
Attached documents including audit report at each stage
Posted the bill payment to the accounting software.
How many logins were there?
The accounting technician logged into the document software
The accounting manager logged into the bill payment software to approve payments
No all-in-one software can do all of the above. Some steps, yes. Not all.
Why Does This Work So Well?
Specialization. When you go to a doctor he will always refer you to a specialist depending on what he discovers, right?
Your doctor will not send you to a nose and throat specialist if you have a sore foot.
Each doctor becomes highly focused on her speciality.
It is the same with software. We use a software called ApprovalMax to route bills to department heads for approval.
The accounting software does not do what ApprovalMax can do. The accounting software acts like a traffic cop receiving requests from the specialized software. It is the hub.
You would not trust a doctor who “does everything”. Nor should you trust a software that claims to do it all.
Two weeks ago, I wrote about all the stunning, very cool software available for small businesses.
Amazingly, these software programs can be used for small businesses up to $100 million in sales volume.
However, some people have concerns going fully into the cloud. In this week’s blog I will address those concerns.
Firstly, My In-House Servers are Safer Than the Cloud
Really? How so? Are they physically safer? Can they be compromised by theft, hardware failure, heat, cold, dust? Are they sitting in a locked, air-conditioned room?
Are you fully satisfied that your backups are restorable?
I once thought I had a perfect backup system for data on our servers. I even tested our backups regularly to ensure they worked.
Then one day, I needed to restore some lost data. Oops. Gone. I have no idea to this day, why I could not restore the lost data. But it was gone. That was a wee bit of a shock.
Managing servers in-house can result in:
Lost data
Hardware failure
Software failure
Outside attacks to steal your data
What Do I Get When I Use a Cloud- Based Software?
Peace of mind is the main thing you get. We started our online accounting business in 1999. We used the latest servers (Dell) and the latest Windows Server software.
We placed our servers in a walk-in vault in our board room in downtown Victoria. We installed air conditioning units in the ceiling.
Still, the headaches and stress was great! Often Windows server software updates changed the way everything worked together.
I had many sleepless nights hacking the registry of Windows so all our clients and Team members could keep logged in.
We then moved to a data facility, and still, many sleepless nights when something broke, or there was a power outage at the server facility.
Moving 100% of our clients to the cloud a few years ago was a huge relief.
Everything was now managed by massive teams of experts for both hardware and software.
You could float on a cloud of peace.
So, is it secure?
Super secure.
As an example, check this out for details (how Xero manages your data):
If It Is So Secure in The Cloud, How Does Data Get Breached?
It is true, your data can be breached.
But first, know that your data is encrypted when it leaves your computer. Second, it is encrypted on the journey back to your computer.
At Xero, unless you let one of Xero’s support Team in by inviting them, they cannot access your data. When you need support, you have to invite them in. They have no way to access any other way!
So, how do breaches occur?
By:
Accessing your user email and password
Phishing attempts
How to Protect Against Data Breaches?
There are 5 things you can do to ensure your data is never breached:
Use secure passwords. Avoid your pet’s name with your date of birth, as an example;
Use multi-factor authentication. Usually this is a unique code generated by another piece of software on your phone. That, combined with a good password, is virtually impossible to hack;
You can check logs of when you last logged in. Look at these logs once in a while to ensure no one has gone in except you and your Team;
Have up-to-date reputable anti-virus software installed. (**NOTE** Windows 10 has been great having built-in anti-virus checks);
Beware of hacking or phishing emails. Do not get hoodwinked into thinking they come from your software provider just because they look official.
Finally, there are ways to dump your data from the cloud to your desktop computers. I will write more about that in another blog.
The last 7 years has seen an explosion in cloud-based software…
Not everyone has fully grasped what this has made available.
What small businesses (and by small I mean up to $100 million in sales) have to choose from now is spectacular.
It is the realization of a dream.
A dream you say? Come on, you are an accountant!
A 1999 Prophesy
Yes, a dream. I will never forget a conversation I had– way back in the old days of 1999. This was when I first had the vision of serving our clients in the cloud.
A man said to me – “Mark, the true power of the emerging internet is not social media. It will be the speed that you can process financial transactions”.
That stuck with me. Well, speed, I have come to learn is not exactly the true breakthrough of the net.
The breakthrough is automation.
Let me explain.
The Evolution
Back in the day (ha-ha) of the 90s, software for small business had evolved to a pretty high level. QuickBooks desktop started as a tool for simple businesses like trade contractors. As it evolved more and more features were added. Businesses with sales volumes of $10-20 million would use QuickBooks.
Even uber-big software programs designed as ERP systems for mega businesses did not have some of the cool features built-in to little, old Quickbooks.
In other words, there was a gap. Boring, featureless software that could handle huge transaction volumes on the one hand. And very inexpensive, feature-rich software that could do lots. The kicker was that they would shake off the rails under higher transaction loads.
Here is what was handicapping software developers…
…the architecture.
A Design Flaw
Let us go back to 1999. You find a good accounting package like QuickBooks. You need a powerful inventory management system. Throw in a super-cool CRM package. Dang, these were not available inside QuickBooks.
So, you shop around for those. Problem number 1 – you would not be able to find a great inventory package that would run independent of QuickBooks.
And here is the kicker…
…no software talked to each other in those days of old just 20 years ago.
Why? Each software company kept their code private and proprietary.
What did you do then? You shopped for an enterprise-level software that did it all. Inventory management. Customer relationship management. Sales order entry.
There is the problem with that. No software can ever be, nor will ever be good at all things. It will have one, maybe two great strengths. Everything else will suck.
Worse, it will be a highly specialized system with less customers and the response time for support will be high.
Customization costs will be astronomical.
The Cloud Breakthrough
Then…along…comes…cloud-based software…
And the dream of software talking to each other beautifully, seamlessly, accurately was born.
This is the current world we live in – a hyper-specialized world where you can buy software that does one tiny function. But here is the cool thing – what happens when you get hyper-specialized?
You get really, really expert at that one thing.
And the proprietary problem mentioned above? Gone. Disappeared. Almost all small accounting packages have open APIs. What is an API? An Application Program Interface.
In simple terms, they let other software programs enter in! Now, software programmers could write a cool, specialized software program and hook into Xero or QuickBooks Online!
The result? It turned basic accounting, although very functional and cool programs like Xero into 800-pound gorillas!
I will illustrate an example of where we are at for a typical small business. This is not exaggerated. It is real.
A Real Life Example
We have clients with 9 separate software programs that together function as a well-oiled machine:
At the core and heart of it all, a basic online accounting for reporting, accounts payable, accounts receivable
Online payroll software that connects to (1)
Inventory management system that tracks unlimited inventory items, in multiple warehouses, in multiple currencies, able to track lot numbers, do drop shipments, cost in real-time, and on and on. This connects seamlessly to (1) above;
Online order entry system for customers to order products connecting to (3) above;
Approval software that routes incoming vendor bills to department heads for approval. It too talks politely to number (1);
Software that chases accounts receivable resulting in fast turnover of accounts receivable. This one connects to (1) above;
Online bill payment software connecting to (1) above;
Document extraction software doing basic data entry, connecting to (1) above;
Finally, stunning month-end reporting package connecting to (1) above. Oh, and it does rolling 3-way, 36-month forecasting. (Message me if you want to know what a 3-way forecast is).
Oh, wait, I can hear your objections! I do not want 9 separate pieces of software! I do not care how nicely they talk to each other! That looks complicated and unwieldy!
Sorry to be blunt. You are wrong. I will tell you why.
What is the Alternative?
The alternative is this. Finding a software vendor – could be cloud-based – that does all of that in one simple package! Be super cool, right?
No. no. no. It is not. It is not because firstly, that software will not do each of those functions well. Number two, it will be way, way more expensive. And number 3 it will become super-expensive as you ask for customizations for things the software above will do. And do much better.
The architecture is all wrong. The thinking is all wrong. It is not where we have evolved to. It is backwards thinking. In the old days – the 1990s – you had to do this. Remember, the software in the pre-cloud days, did not communicate at all, let alone nicely.
If you want a fourth reason, here it is. What happens when that custom, Mr. Big Software Package fails? You have everything in one basket.
However, if one piece of that 9-item software suite fails, you only need to focus on one piece of your business.
Another objection I hear is cost. I hear people say, “I only pay $450 a year for QuickBooks desktop. I do not want to pay for 9 pieces of software!”
The good news is some of the software above is free when you use Xero. That would be the document extraction. Others are super low cost. As in, $25/month. The one doing all the heavy lifting will likely be the inventory management system. That is more expensive, yes. However, compared to a full-blown, all-in-one ERP system it is ultra-low-cost.
What We Do
But here is what you must know. The level of automation, and cost savings are radical. And the 9-suite software system mentioned above becomes very, very inexpensive. There is a catch…
(Warning. Warning. Beep. Beep. Commercial coming. Ok, you have been warned). You need someone who will setup the automation for you in a way that takes advantage of all the features available in the cloud software out there. Someone who will not only impeccably set it up. They will train you and co-manage with you. If needed they will run the whole thing for you. That would be us, at ControllershipPLUS.
What is the greatest thing in your business? The tools you use?
Nobody Cares What Tools You Use
Imagine you are a home builder. And, you have the absolute best tools in that industry. You have the Triple A, skookum, best-in-class power widget tools out there.
Maybe you have custom tools that no one in your industry even heard of.
Does your customer care?
No.
Sorry. No.
I can prove it. A guru home builder has the ability to make you a stunning home with a hammer, and handsaw. You see where this is going, don’t you?
It is so easy to make this mistake, though.
I do it all the time. When we started our amazing, skookum, best-in-class outsourced, online, fixed-fee accounting service 20 years ago, NO ONE was doing it.
We developed custom scanning/upload software to do it.
We were immensely proud of that, and our custom servers, and dual monitors (at a time when most considered that wasted screen real estate). So…we…talked…about…our Cool Tools.
We signed up clients, but not because of our cool tools.
Nobody Cares How Great Your Team Is
Ok, so you zip your lip on the cool tool topic. Great!
Do you think your customers/prospects want to know how amazing and skilled and peachy your Team is?
I could talk about our amazing Team for hours. Why? Well, they are simply amazing. And I am proud of them.
Prospects do not care. Why not?
They do not know them like you do. You might as well talk about how cute your children are!
They do not care. Sorry.
Nobody Cares About your Systems, Features, Price, How Long You Have Been in Business…
You can tell that headline could be 9 miles long, right?
This blog could have been one sentence long. Nobody cares – gives 2 cents – about you, or your business.
That is really the truth, isn’t it?
Selling is exactly like dating.
The person you are interested in dating is not interested in anything about you. Yet. That will come.
They want to know what difference dating you will make in their life. What experiences you will bring. The fun. The joy. The laughter. The romance. The future. The children. Ok, you get the idea…
Prospects Have One Thing. And They Are Looking to You for One Thing Only
Prospects have a problem. In many cases they do not know they have a problem.
Your job is to uncover it. Your job is to be the solution.
Talking about the tools you use, the Terrific Team you have, or any other feature is of zero interest to them.
They need to hear you say exactly what their problem is. They want you to say it in a way they can hear it. (They may be embarrassed about their “problem”).
You have to find their pain.
Empathetically.
Because emotions are involved. They want to feel great about their decisions.
Great selling can be summed up as:
Find their problem
Find their pain
Be the solution that makes them feel excited
Do you never talk about your great Tools, Team, and Techniques?
If they ask. But keep it short and focused on the results/solution you will bring to resolve their pain and have them feel excited again.
