Chuck's Reporting and Technology Corner - January 2011

by Chuck Vigeant January 26, 2011

I have long had a saying about the majority of small businesses. “There are only two things they care about:  meeting payroll obligations, and generating more sales”.  (And if you don’t have employees, YOU are the payroll).

Considering the fact that less than 5% of all business ever generate one million dollar in annual sales, there is probably some truth in that adage.

Our evolving consulting skills

I have heard Doug Sleeter opine about the definite shift in how QuickBooks consultants and practitioners will manage their practices and business models.

Let’s look at the stages that some of us have lived through (for those who want to age ourselves) since the mid 1980’s when the first personal computers arrived on the scene:

  1. Automate your financials by putting them in a computer.  I remember the early days of Peachtree and VisiCalc, when many of us saw how a computer could quickly calculate financial statements without having to go through boxes of No 4 pencils, and a trip to the local office supply store for fresh new packets of green bar paper.
  2. Putting your client on Peachtree, and teaching them how to fish for themselves.  I remember my first attempts at trying to teach clients how to use Peachtree, and show them that they did not have to wait three months for their financial statements.  Although some of the CPA’s I dealt with were probably not too happy with this encouragement, I often convinced both the client and CPA to meet once a quarter to discuss the financials, bookkeeping procedures, general ledger detail, etc.
  3. Moving to QuickBooks.  I was one of those who did not like QuickBooks at first, because I surmised that it wasn’t a ‘true accounting package’.  However I soon realized two things:  (1) Business operators did not want to create a credit memo for 2 cents because they had made a posting mistake on an invoice – they just wanted to change the darn thing; (2) We made more money cleaning up the mistakes because clients believed it was easy to use, and they did not need our help. (I have an audit trail now, I am happier.)
  4. Multi-tasking and integration.  The ability to run multiple windows programs, and to actually move data between one application and another empowered us to look at information from disparate systems, and to create ‘best of breed’ solutions.
  5. Efficiency expertise.  The mantra of the last 10-15 years has been to ‘let’s automate your business’.  We have become experts on software usage, workarounds, integration, and how it can save money by automating each process.  I have often reflected on this as similar to the time and wage efficiency studies of the 40’s and 50’s.
  6. Business consultants.  IMHO this is the coming modus operandi.  With the advent of online software applications for convenience, cloud computing, social network, we will have to know more software applications, but will be dealing less with workarounds and software installations and setup - and more with helping a business make sense of the mounds of data that is locked up in these applications.

Consulting and business analytics

We have gone from getting a financial report three months after the fact, to real time reporting, but we are about to enter a new era.

If you had mentioned business analytics a few years ago, it would probably have been synonymous with custom reporting.  It has progressed to dashboards, pretty pictures, visualization – you name it.  But we are still missing the point.

Since the advent of personal computers, accounting applications have excelled in the areas of compliance reporting (although some could easily debate that in the early years of QuickBooks – where was the simply payroll register?).  We now have some specific industry reports that make life easier for small businesses, but again it is historical data.

In our business during the last decade, the bulk of our projects have been concentrated in:  people wanting custom reports that they can’t get out of their accounting application because (a) someone in the business has always looked at this way;  (b) they need commission reports;  (c) they need a comprehensive job costing report; or (d) multiple company reporting needs.

However, the requests in the last two years have changed significantly:  people want to analyze their data; they want to look at history and assimilate trends in the future; they want the freedom to take different paths when they see something in their data; they want to know the effect of marketing campaigns on their bottom line; they want to know when they should hire another person; they want ‘what if’ scenarios.  For accountants, they want to have better data reconciliation tools, and they want to provide answers for their clients.

Bottom line: clients want information to not only run their business, but to make better decisions for the future.

Some improvement – but still way short

The smaller accounting applications have now added simple metrics like average days to pay, high balance, etc. which really helps daily operational decisions, and they have also added simple ‘Business Intelligence’ graphs which give you a quick informational overview.

But we still have a major problem: each accounting application has portrayed the way THEY think the data is meant to be viewed by the majority of users.  And to sell more ‘boxes’ and keep the shareholders happy, I can’t argue with that.

But, there is good size chunk of the user base which wants to see things the way THEY want to see them.   But despite the best intentions of many in the developer community, one thing is still true: some data is still locked up, and/or in raw format that takes a rocket science to figure out – even for developers.

I am amazed, that after 8 years since the Intuit SDK appeared, certain data is either not available, or so difficult to obtain, that the final customer experience is disappointing.  Now, I have enjoyed a great partnership with Intuit all of these years, and I have some hard working colleagues/friends over there – but the decisions that affirm WHETHER we should get certain data are something that world dictators would gloat over. 

I understand the needs for prioritization, resources, and the business case, but clients work hard to put their data into their system – and if it involves a dollar amount, and an account name, they shouldn’t be told that ‘it is not important, and you won’t get it’.  And this should be true whether the emphasis is on the IPP or not.  To this day, it still confounds my thought process.

The IPP is a technological marvel, but after talking with many of the developers at the recent Sleeter conference, a surprising majority was skeptical that it was the best avenue for their future offerings – for a variety of reasons that I won’t discuss here.  Are we going to be stymied again?

The ODBC views for QuickBooks Enterprise should have everyone singing the ‘hallelujah chorus’, but again we are missing some critical data, and many of my peers have expressed trepidation about the investment it takes – not to just explore the data, but to reverse engineer how QuickBooks USES that data.  I could post all of the documentation in the world, but there is a big gap between knowing a data schema and implementing brand new skill sets and solutions.

Peachtree has exposed most of their data and have bundled Crystal Reports for years with their product – as has been true with a majority of accounting applications I have worked with over the years (SBT, Great Plains, Navision, etc.).  You still need a rocket science degree to work with these, but at least the data is available.

I have picked on Intuit here because of my deep involvement with their data interfaces over this past decade, but they are not the only ones in the software world who either do not provide full access to data, API’s etc., or make it difficult to implement.  You could pick out just about anybody, and express a level of frustration or two.

Yet, people just want their data.

My chief engineer keeps telling me: ‘if it was easy, everybody would be doing it’.  I really hate when he says that….

What is on the horizon

Many of us have been in the accounting technology field – whether it is technical, tax, bookkeeping, coaching – are searching for new business models, and for ways of helping out our clients. 

I see a real challenge for all of us – not just for those of us in the business analytics world.  The data repositories are growing exponentially with each new application, and we are going to have to make sense of it all.

Whether it is Peachtree, QuickBooks or any accounting application, we have multiple ways to get the data (e.g. IPP, SDK, ODBC, QODBC) and we have multiple versions and iterations of the software (e.g. desktop, online, vertical industry).  And then we have data in applications that TIE to the accounting applications – CRM, Project Management, Time and Billing, Inventory, Quoting, Sales Management, etc.

Top that all, with data from social networks like Facebook and Twitter, and your head will swirl. (Don’t worry, even the terabyte data experts haven’t figured out how to glean all of that data yet.)

  1. How do you put all of that together?
  2. How do you get instant information from ALL applications?
  3. How do you make sense of it all for your clients?
  4. How do you create forecasts and what ifs?
  5. How do we empower businesses to grow and create satisfied customer bases?

Reports for compliance reporting, and daily operations will be there for a long, long time; analytics for running businesses is still at the tip of the iceberg.

Next month:

Diving into business metrics


  • Charles R says:
    January 26, 2011 15:43

    Thank you for a great article, Chuck! I agree with you, as the SDK is complicated to work with, the IPP is a big kludge, QODBC works great but you have to unravel the QuickBooks format, and the new ODBC feature is terribly complicated (and limited to Enterprise). I am always trying to pry data out of QuickBooks, and they make it REALLY hard. If I find it hard (and I'm a SDK programmer), then people who are not technically inclined are going to have trouble.

  • Sam B says:
    January 26, 2011 16:03

    I hope you're right, Chuck. I just started a business providing business analytics to small businesses using QB. I'm calling it a Profit Improvement Process whereby I model their financial data to produce a budget. Then I want to come in every month to monitor performance. I'm going to try to market this to CPA's, business brokers, etc. who hopefully can refer me to businesses that want to look forward as well as backward.

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