INTRODUCTION

QuickBooks from Intuit Corporation is the most widely used business accounting and management software by small and mid-size businesses. Since its introduction, QuickBooks has increased in popularity. However, the usefulness of QuickBooks depends on one key element - the accuracy of the information that the user inputs.

Many small and mid-size business, which are the primary users of QuickBooks, are not getting full value from their investment of money and time because of data input errors.

In accurate information in QuickBooks results in inaccurate reports being generated by QuickBooks. These bad reports can result in poor management decisions.

USAGE ISSUES

Users of QuickBooks must confront three issues about their usage of the software. One relates to human nature; the second concerns typical business routines; the third is cautionary.

In terms of human nature, various studies by software manufacturers and empirical research shows that once a user of a software product is proficient in a software package for the standard tasks, the learning stops. This is an understandable response to getting done what needs to and moving onto the next task.

The demands of business also sidetrack a person's ability to learn more than what is currently needed because of lack of time for experimentation and learning by doing. All too often, there just isn't time and the priority isn't there.

Finally, in most businesses, once data has been recorded it is treated very carefully, with limited access and back-ups. This is especially true with data and documents that are needed to keep track of business for practical, economic and legal reasons. Experimenting with this type of data and learning while doing is often actively discouraged, in case the actions could accidentally change the data or cause it to be erased.

For these three reasons, many business owners are not receiving full value for their QuickBooks investment.

Many owners are not even aware of what additional management information may be available from QuickBooks because the person or persons at their business entering data about the product and services haven't progressed beyond knowledge of the basics. The boss is likely to be operating under the same human nature issues, time constraints, and cautions that influence the employees are. Everyone becomes satisfied with the basics, not having the interest or time to do more than the basics.

These three reasons also can lead to an unquestioning attitude of the correctness of the data in QuickBooks. Because people are not using the information to learn more and critically think about QuickBooks, there is no reason or opportunity to find errors in the data files.

The solution is to have the business owner obtain professional advice on 1) the use of the software (more of a technical issue), 2) obtain management consulting advice on what additional information and reports are available, and how these additional reports and information can be used to improve the business, 3) and perhaps the most important, determine the accuracy of the data that the owner uses for management decision making.

The QuickBooks software is a tool for the effective running of a business. Like any tool, the software can be used on a basic level with the user never learning about the more complex but powerful capabilities. Or the user can investigate the software and develop into a skilled craftsman to fully utilize the tool.

WHAT BUSINESS OWNERS AND ACCOUNTANTS SAY

In a recent national survey of 100 accounting firms and 100 small businesses, Intuit Corporation, the maker of QuickBooks, America's best-selling small business accounting and management software, found the following:

• Both the accounting firms and their clients identified not having enough time as their most pressing concern.
• For businesses, this concern was followed in order of importance by their concerns of increasing revenue, growing their business and better managing their employees.
• While businesses generally place high trust in their accountant, the areas in which small businesses feel their accountants have under-performed include: 1) getting additional help in controlling their costs, 2) getting better business advice, and 3) getting help in understanding their bookkeeping.
• From the accountants' perspective, the greatest challenge in providing a higher quality of service is 1) their clients' lack of bookkeeping knowledge and 2) a general inadequacy in their financial records.1 This is an important concern because, in order to be successful, a business must be run by its numbers - its key performance indicators. Effective management depends upon efficient measurement. When your company's numbers are not correct, decisions based on them will be faulty and may even be damaging to your business's financial prospects.

Additional surveys have found that:

• Do not have confidence in the accuracy of their monthly financial statements.
• Experience data input errors that compromise the integrity of their management reports.
• Do not fully utilize the management control tools within the software due to set up and user errors.
• Only see accurate financial information once per year, after their accountant has "cleaned up" the data for tax purposes.

BACKGROUND OF QUICKBOOKS MARKETING

To better understand how this situation has come about, consider how QuickBooks has been marketed over the last decade.

For many years, Intuit's highly effective marketing strategy involved targeting its software almost exclusively to non-accounting people. This strategy implies that:

• with QuickBooks, you did not need accounting skills to handle the company's books, and
• since the QuickBooks was so intuitive, one didn't need to spend much time learning the program².

Business took the Intuit message to heart and rushed, in droves, to this modestly priced accounting package.

The George S. May International Company, a management consulting firm that works with over 15,000 small to medium-size businesses each year, can attest to the popularity of QuickBooks. The comprehensive system is the accounting program of choice for the majority of May International's clients.

Over the years, however, QuickBooks has developed from a basic general ledger package into a sophisticated business management system. Among the sophisticated features of today's QuickBooks software are:

The ever-increasing complexity of the program has begun to overwhelm the average user. The accounting and business skills of QuickBooks users have not kept pace with the advances from QuickBooks. As a result, most small businesses are not even coming close to exploiting the power and sophistication of QuickBooks.

Furthermore, since most small businesses do not employ professional accounting personnel, management consultants, or professional QuickBooks advisors, many of their QuickBooks data files - the electronic file wherein all the QuickBooks features noted above are located, including all of the company's transactions as well as its customer, vendor and employee information - include errors, inaccuracies and misleading information.

IMPORTANCE OF GETTING THE RIGHT DATA

As was noted earlier, if the data entered is wrong, the results of that data will be wrong. This is a major and widespread problem for small business.

Based on QuickBooks' popularity among small to medium-size businesses and its value to business owners, May International consultants receive special QuickBooks training to help clients more effectively navigate the system.

Michael Gerber, author of The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It, says that the number one cause of small business failures is their lack of management systems. He flatly states that "most entrepreneurs have no systematic way of generating information or determining what is and what is not working. Also, there is little or no effort to convert data into usable information." This leads to the bleak situation facing small businesses today.

"Of the 1 million U.S. small businesses started this year," Mr. Gerber writes, "more than 800,000 (80%) of them will be out of business within five years and 96% will have closed their doors before their 10th birthday." 3

Israel Kushnir, president of the consulting firm May International, concurs. "The ability to quickly and accurately measure the progress of a business and determine its condition is essential to the success of any operation. Unfortunately, while most business owners are experts in their specific trade, accounting and financial record keeping often get short-service in day-to-day business operations," he said.

Kushnir further pointed out that inaccurate or incomplete accounting records are fatal to any business no matter how well received a product or service may be.

Clearly, there is a crucial need for professional assistance with QuickBooks. Not only to provide business people with skills on how to better use the software, but also assistance on ensuring the data being used for decision making is accurate.

Indeed, finding the right QuickBooks assistance, and structuring the business relationship with that consultant in such a way as to gain maximum service for the company, is one of the most important business management decisions a small business faces.

ROLE OF THE QUICKBOOKS CONSULTANT

It is instructive at this point to briefly list some of the many services a professional QuickBooks consultant may provide. These include, among others:

Of these services, especially important to businesses that have been operating for some time without the help of a QuickBooks professional are the need to check the accuracy of the data files and assistance with "entry-level" services of Data File Analysis and Knowledge Assessments.

QUICKBOOKS DATA ANALYSIS

There are two services that most companies should consider -QuickBooks Data File Analysis and Knowledge Assessments-should be the first engagements they request of their QuickBooks consultant. These services will provide you with an excellent "snapshot" of your current situation-the state of your company's books and a picture of your accounting staff's knowledge and skill levels in the areas of QuickBooks, accounting, and computer usage.

For most companies, regular analysis of your company's QuickBooks data file is an important element in ensuring the company's accounting and financial health. This is so because, while QuickBooks is a well-built, robust program, tremendously useful for tracking a company's financial status and progress, like any computer program, its usefulness may be limited by the operator or data input error.

Data file errors and corruption can result from any number of causes, including:

• Improper use of the program
• Conflicts with other programs
• Interaction with other programs through file importation
• Lack of understanding on the part of users as to the program's features and limitations
• Inadequate knowledge on the part of users of accounting theory, and
• Other causes too numerous to catalog.

The sheer heartiness of QuickBooks allows the program to continue functioning with multiple data file errors and corruptions. Unless the user - or, more likely, their consultant - initiates a data file analysis, these errors and corruptions may go undetected for months or even years, rendering the financial reports incorrect, and even misleading. Needless to say, the longer the data file goes unanalyzed, the more work will be required to clean up problems which may arise, and compound.

Since a company's financial statements and tax returns, as well as its strategic planning decisions, are based on the underlying financial data within the data file, it is imperative that the data file be analyzed regularly. Monthly analysis is recommended.

Therefore, it is critical that a quick, efficient, reliable, automated, systematic, and comprehensive method of analyzing the data file be employed. This is where the QuickBooks professional's computer program, QDA, (QuickBooks Data Analysis) comes into play. This program will be described later in this publication.

KNOWLEDGE ASSESSMENT

By using Knowledge Assessment procedures, a QuickBooks consultant interviews, tests where desired, and provides a formal, written assessment of your staff's knowledge of QuickBooks, bookkeeping, and computers in general. These assessments document areas of weakness where additional training can be beneficial. When used regularly (quarterly is recommended, more often if there is turnover of staff) in conjunction with appropriate ongoing training, knowledge assessments document and quantify your staff's improvement and, thus, your company's return on its investment in staff training.

QUICKBOOKS CONSULTING - WHO DOES IT?

While some accountants and tax advisors are also QuickBooks consultants, most are not and, thus, are not qualified to be your QuickBooks consultant. Your QuickBooks consultant need not be a CPA or tax professional. They must, however, understand the needs of your CPA and tax advisor and must communicate effectively with them. The fact is that, like the accounting and tax professions, QuickBooks consulting requires specialized knowledge.

The management consultants of the George S. May International Company focus their QuickBooks work on the integration of reports generated by QuickBooks into the business' management and procedures. When more specific, technical assistance is needed, May International consultants work with certified QuickBooks consultants. Two certifications are available.

The designation of Certified QuickBooks ProAdvisor^TM is one provided through Intuit Corporation. The designation of Certified QuickBooks Consultant^TM is provided through the Sleeter Group, an organization of highly trained individuals with specialized knowledge in QuickBooks and accounting.

These designations are both granted through private organizations and are independent of each other. Both, however, require their designees to pass a test demonstrating extensive knowledge of QuickBooks.

While certifications provide evidence of knowledge and skill level, in and of themselves they are insufficient. Most important to you is that your QuickBooks consultant has a thorough grounding in the program, plus a strong understanding of a company's accounting and business processes, its management, its financial statements and management reports.

For example, May International management consultants are specially trained in QuickBooks. However, QuickBooks is just one step in the process of helping a business to become more profitable. In a thorough analysis of a company's business operations, May International consultants review the history of a business and take a close look at policies and procedures, sales volume, profits, profit trends, inventory turnover and more. With a complete picture of a business, a May International consultant can more accurately tailor QuickBooks applications to best suit the needs of a client.

WHAT TO LOOK FOR IN A QUICKBOOKS CONSULTANT

Qualifications and Experience

You'll need to evaluate a prospective consultant's qualifications and experience in light of your company's needs. You should ask for their résumé, and be prepared to evaluate it and review it with them.

Supporting Organizations

If your consultant is working for or is associated with a company, you should inquire as to the level and quality of QuickBooks support that company can provide to both the consultant and to your business. May International is an example of a company that provides QuickBooks training for its consultants. Not only are May International consultants better equipped to help clients more effectively navigate QuickBooks, they also help businesses install QuickBooks software and seamlessly integrate data from an existing accounting program.

In addition to the consultant's company, does the consultant have access to a professional support organization? Such support can be instrumental in providing the consultant with the ability to adequately address ongoing QuickBooks problems in a timely manner.

For example, consultants from May International and Sleeter Group QuickBooks professionals have developed a solid working relationship. When a QuickBooks issue is beyond the scope of a May International consultant, a Sleeter Group professional is available to troubleshoot the problem and identify a solution.

Ongoing Training

Does your QuickBooks consultant maintain an ongoing program of professional training? QuickBooks consulting is an ever-changing profession, with new features and products continually being introduced. To best serve your business and help it maintain its competitiveness and profitability, your QuickBooks consultant must keep abreast of changes in software and hardware technology.

You Get What You Pay For

Although controlling costs is always an issue to small businesses, it should not be your only concern. When it comes to QuickBooks consulting, the old adage "you get what you pay for" is true. If you want the services of a professional, be prepared to pay professional rates.

When it comes to QuickBooks consulting, what you should be focused on is accountability and return on investment. Whenever possible, your consultant should suggest ways to streamline your business systems and processes, and should seek evidence demonstrating quantifiable improvements to your business resulting from his services.

The Proper Tools

In any profession, to be a true professional one must have the proper tools - tools that allow one to provide services as efficiently and professionally as possible. The foremost tool among QuickBooks professionals is QDA.

QDA automatically interrogates your company's data file - without in any way changing it - and issues a professional-quality report detailing:

• problems encountered,
• their likely causes,
• various implications for the client's QuickBooks usage, accounting and business processes, and financial statements and reports, and
• consultant's recommendation for corrective action.

With QDA, QuickBooks professionals can deliver Knowledge Assessments and Data File Analyses in a fraction of the time, and with more extensive testing and greater quality control than can be provided under a manual system. This increase in quality and efficiency serves the interest of both your consultant and your company, since 'lack of time' is your greatest shared concern. Time is money.

Personal Attributes

Your QuickBooks consultant should possess the following personality traits and skills:

• A logical mind.
• Good analytical skills, including the ability to "solve for the unknown" - a critical accounting skill.
• Project-orientation, with a need for "closure." This is important since you will need to know when the consultant expects to complete projects begun and will want to be assured that the consultant is focused on meeting the target completion date.
• An attention to detail.
• A good working knowledge of bookkeeping.
• Good oral and written communication skills.
• An amiable and patient personality. This is especially important when working with your company's personnel, as they will likely be less skilled than your consultant.

A Professional Approach to Consulting

You should discuss with your consultant their approach to QuickBooks consulting. A professional approach to consulting will include the following characteristics:

• A determination to meet or exceed their client's expectations.
• A concern for their professional image and reputation.
• Certification and continuing professional education.
• A system of standardized policies, procedures, and methodologies designed to ensure they could provide services that meet or exceed a generally accepted code of ethics and formal, written standards of quality control.
• A formal process for client and engagement acceptance.
• A system for documenting the exercise of due professional care throughout engagements.
• Knowledge of your business and industry.
• Professional reports and work product.
• A determination to demonstrate quantifiable improvement to client's business, when possible.

May International consultants, in their broad scope of management consulting work, and Sleeter Group QuickBooks consultants, in their more technical roles, are both specially trained to meet and exceed these expectations. They work within a system of checks and balances designed to ensure positive, quantifiable results within an agreed up time. In addition, ongoing training keeps consultants up-to-date on trends in specific business categories.

SETTING EXPECTATIONS

It is important for any consultant to define the work to be accomplished and provide what you as the client should expect based on the work performed.

May International consultants use documents entitled "Recommendations" with information about the work and expected results. This is a standard format that the firm uses throughout its consulting operations, whether or not the effort involves QuickBooks. Recommendations, along with the previous contractual forms, cover all aspects of the work to be performed. These documents benefit both you and the consultant, and reducing the chances of a misunderstanding.

As the work progresses, if there are changes additional Recommendations or an addendum to the engagement letter can be developed. These serve the same purpose as a Change Order form used in the construction industry.4

You should also come to an agreement with your consultant as to the proper approach to accomplishing the engagement. To effectively organize the work and avoid overlapping effort your consultants should show how larger engagements are conducted in phases or in a series of smaller engagements. These can be reflected in additional Programs, Recommendations or Engagement Letters.

CONCLUSION

To obtain the maximum value from an investment in QuickBooks software, business owners should obtain the advice of a consultant skilled in the operation of QuickBooks. This outside expert must be able to do three things:

• understand the operation of your business,
• understand the QuickBooks software, and
• most important, the consultant must be able to work with you, the business owner, and your people to integrate the QuickBooks methodology and information into more effective management and more profitable operation of your business.

Sources

• Bill Teague, What Clients Want Most is Time, Intuit ProConnection Newsletter, Nov. 2002.
• Doug Sleeter, Why Client Choose QuickBooks, The CPA Technology Advisor, June/July 2004.
• Michael Gerber, Why a Large Number of Small Businesses Fail, Home Office Computing, May 1994.
• Robert Spencer, PhD, The Five Phases of a Consulting Engagement, Intuit Pro Connection Newsletter, February 2004.
• Bizibody Technology Pte, Ltd, Choosing Your Bookkeeper.