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Wendy Gustafson

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Streamline Processes with Credit Card Enhancements in Deltek Vision 7.6

Posted by Wendy Gustafson on Wed, Nov 02, 2016 @ 10:00 AM

Vision 7.6 Credit CardsDeltek is at it again! With the introduction of Deltek Vision version 7.6, professional services firms are now able to streamline their credit card processes thanks to several new key enhancements. Providing some background, the introduction of credit cards was one of the many improvements to Vision in version 7.3. When 7.3 was released, firms gained efficiency with employee expense reporting as employees could import charges from the credit card company. This feature allowed employees to associate those charges within their expense reports. Now, based on user feedback, credit card functionality has been expanded.

Review and Reconcile Credit Card Expenses with Ease

Deltek has enhanced the Credit Card Review application in Vision 7.6 which now allows users to easily review, filter and analyze credit card charges. This updated Credit Card Review offers additional information such as the expense report or voucher details and the General Ledger account number for each charge. Furthermore, any user-defined fields imported to help the employee categorize the charge can now be displayed in both the Credit Card Review and Credit Card Reconciliation screens.

More Functionality than just Company-Paid Credit Card 

When credit cards were initially introduced, the focus was on cards paid by the company. In Vision 7.6, purchases made by employee paid credit cards are now included. These charges are treated like typical expenses that are reimbursed to the employee.

As with the company paid credit cards, these charges can be uploaded and made available for the employee to associate with the matching expense within expense reports. Additionally, the Merchant/Description from the imported credit card charge now appears in the expense report description field. This option is available for selection when setting up credit cards in Vision.  

Do More with Deltek Vision 7.6 

Deltek has been listening to Vision users over the years. With each new version, Vision becomes more robust in order to meet the growing needs of professional services firms. If your firm is on Vision 7.6, make sure to activate Credit Cards and begin to streamline your expense report process.

Deltek Vision 7.6

Topics: Accounting, Deltek Vision

Creative Billing Can Improve Your Cash Flow!

Posted by Wendy Gustafson on Fri, Apr 29, 2016 @ 04:10 PM

Cash FlowCreativity, when used in the accounting world, is usually considered a “no-no”. However, I am not talking about misrepresenting the state of affairs. In fact, I am talking about the exact opposite - providing the client exactly what you told them to expect at the beginning of the proposal process. Let’s take a look at how setting client expectations early can improve your firm’s cash flow. 

Setup a Project Process

I am not saying that project management and marketing get to dictate accounting functions, but I am saying that it is imperative that accounting work with project managers and marketers to ensure the signed agreements match the accounting schedule and billing possibilities. To do that, accounting needs to understand the needs of the client and the project managers, as well as the functions and limitations of the software they use for accounting and billing.

From there, you can create a project set up process that easily allows the project managers to see where they are in the project in relation to the budget and plan. This ensures the invoices match what the client was told to expect. As a result, clients are more likely to pay on time and you can count on the cash flow coming in from your clients.

Understand Reporting and Timing Requirements

In many cases, clients have specific reporting and timing requirements – some are reasonable and some are not. Involving accounting at the front end of the project to have discussions with the clients about what is possible and not possible will go a long way to ensure a smoother billing/collection process down the road.

However, accounting can’t become obstinate with the “we don’t do things that way approach.” There has to be a willingness to work with the others to solve the issues between the client desires and the current accounting process. Having he accounting staff work directly with the client to resolve the issues will ensure both understand where the other is coming from.  

Have the Right Accounting System

Understanding what the client needs and understanding what is possible in the billing system allows accounting to bridge the gap. Of course, having a system that offers many options to bill the client helps too. At a minimum, your system should allow you to create billing cycles that allow for most client timelines.

The better systems will allow for billing to be prepared with multiple options for the way the labor and expense are handled. Additionally, they have ways for managing fees and additional items such as credits. The best systems allow for changes in the invoice format so the final product has the required information in more or less where it is needed. Again, flexibility, creativity and patience are often needed.

Let the Cash Flow

Remember that a good collection process begins by communicating with the client - take the time to understand their needs and explain what is possible. Create a billing process that is flexible enough to support client expectations and is efficient enough to be managed internally. Doing so will go a long way in avoiding issues down the road.

Deltek Vision

Topics: Tips, Accounting, Technology Solutions

Marketing & Finance: 3 Tips for More Meaningful Conversations

Posted by Wendy Gustafson on Wed, Sep 30, 2015 @ 10:05 AM

3 Tips for More Meaningful ConversationsMarketing and finance often seem destined to clash. The common misconception is that marketing’s sole purpose is to spend money, while finance does everything in their power to throw up hurdles to spending. Marketing focuses on building quality relationships and creating brand equity, while finance has an, admittedly sometimes myopic, focus on hard numbers and empirical evidence. Let’s examine how we can help marketing better communicate with finance and bring these two opposite ends of the spectrum together!

Speaking the Language of Finance

We are all familiar with the saying ‘it is better to give than receive’:  If marketing and finance applied this principle to their interactions the entire company would reap the benefit in the long run! Accounting can often be over protective of financial data and systems, and rightfully so – when things go wrong, everyone looks their way! Take on the responsibility of proving your marketing efforts in language finance can understand – data, not Facebook likes – and you will find that your finance department will be a lot more receptive to your efforts and requests.

Smart Tips for Creating a Better Conversation:

  1. Put yourself in accounting’s shoes and understand hesitancy | Understand that often times finance is not questioning the value of marketing, they are however questioning how to quantify the results to the effort/cost. Marketing is not a perfected science and your mere desire to track marketing ROI will show your finance department that you too have the company’s bottom line in your best interests.
  2. Establish desire to measure marketing ROI | The single biggest hurdle with communication is the illusion that it has taken place! Don’t sit back and assume that your finance department is aware of your desire to be a metric-driven-results-producing marketer. Get the conversation started!
  3. Think about data needed to do your job better | This can be a tough one! We suggest starting small and working your way up. Doing so will allow you to include finance in the discussions regarding your marketing planning, and help you better understand the value of the metrics you are tracking.

How to Start the Conversation

Need help getting the conversation started? Here are some of our favorite ways to open a two-way dialogue:

  • Retaining & Gaining Clients: “I’m looking to understand our total customer growth. Do we have a way to determine by percentage and revenue the amount of our work we’ve received is new vs. existing clients throughout the year?”
  • Pursuing the Right Client: “I’m looking at how we can be more strategic in our pursuit of clients. Would it be beneficial to advise you when I see we are pursuing more work with clients that we are having AR issues with?”
  • Forecasting and Backlog: “Can you help me understand what our break-even is and do we have a way to see what our current backlog is? I’d like to help make sure we have enough business coming in the pipeline for each market or division.”
  • Effectiveness: “Can you help me better understand how I affect the bottom line? I want to develop metrics that help me understand the financial results from marketing’s efforts and help me fine tune my approach.” 

We hope that you are able to apply these tips to start a better dialogue between your marketing and finance departments. Improving the synergy between these departments will result in marketing receiving more support and executive buy-in, while finance is able to capture the analytics and financial metrics they crave.

Ready to take your conversations to the next level? Check out this on-demand webinar to see how marketing and finance can team up for greater results!

 

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Topics: Tips, Accounting, Marketing

All Employees Complete Their Timesheet On-Time…April Fools?

Posted by Wendy Gustafson on Wed, Apr 01, 2015 @ 11:31 AM

What’s the biggest nuisance of every company? What is that one activity that makes almost every employee groan with boredom?  Timesheet completion! Getting employees to complete timesheets on time and accurately is a thorny problem that plagues many firms.  While it can be a laborious process, it’s also an enormously important part of the accounting function.  

Full Sail Partners Mock Interview with Michael Scott of the Office

michael scott

Wendy Gustafson oversees accounting and human resources at Full Sail Partners, Inc. With 25 years of accounting experience, including 12 years in the architectural and engineering industry, she is always prepared to guide clients developing financial solutions and best practices using Deltek Vision®.  As with many financial professionals, one of the biggest curses of Wendy’s existence is … you guessed it, timesheets!  Wendy decided to do some research and find out how “the best of the best” in the industry deals with this small, but vital, matter.   

Michael Scott is the co-manager of the wildly successful Scranton, Pennsylvania branch of Dunder Mifflin, the New York City-based regional paper and office supply distributor, and the central character on NBC’s mockumentary “The Office.”  Let’s see how Michael handles this.

Wendy:  So, Michael, what’s the key to getting your employees to complete their timesheets?

Michael Scott:  Here at the Scranton branch of Dunder Mifflin, we don’t believe in timesheets. Because then we would have to pay our employees based on the hours they actually worked.  And we don’t want to do that.  We find that paying our employees for their actual hours really hurts my numbers, and I end up looking bad.

Wendy:  You know, of course, that you still have to pay your employees, even if they don’t submit timesheets.

Michael Scott:  Oh…uh, of course was just joking – you need to lighten up [smiles and laughs uncomfortably].  We used to have a “timesheet trophy” that employees kept on their desk if they were the last to submit their timesheet.  Then we had David Wallace sit at employees’ desks until they completed their timesheets.  But he got mad at that, because I was calling him to drive from New York every week.

Wendy:  Now that many employees are virtual, what do you do?

Michael ScottI have found electronic shaming successful. I post pictures of my employees with little signs around their neck stating, “I was late submitting my timesheet” on their Facebook pages.  You’ve seen the dog shaming pictures …they always make me laugh [chuckling to himself for several minutes]!  Oh, and we got Ryan to set up a twitter account #timesheetyouarelateagain.  We are up to 9 followers!

Wendy:  Public shaming is probably not the most effective way.  You might want to look at your timesheet process:  maybe it’s too difficult or laborious.  Also, you could communicate the value and importance of timesheets which might help them understand the impact on your accounting process.  Or you could …

Michael Scott:  [Interupting] Blah, blah, blah … you corporate eggheads are all the same. Employee communication, streamlined processes … I don’t know what any of that stuff means.  You know [leaning forward] the best way to truly motivate employees? Buy them stuff!  I take most of my weekly paycheck and buy my employees things in order to get them to complete corporate forms.  Why just last week, I bought Stanley a refrigerator.  Sure, I don’t have much left over for my own needs, but it’s completely worth it.  I look like a corporate hero and my employees are happy! 

Wendy:  Well Michael, this has been an interesting and enlightening conversation!  

So why are timesheets so important?

Getting employees to complete timesheets on time and accurately is, as we’ve discussed, a difficult problem. In a professional services firm, we sell our consultant’s time which equates to the largest expense on your income statement. The importance must be conveyed from the top down and here are reasons why firms should be concerned:

  • The sooner timesheets are in, the quicker your firm can get paid
  • The sooner you can get paid, the more you have to invest in your firm
  • Incomplete timesheets lead to inaccurate reporting and wasted time
  • Delayed timesheets (especially 1-2 weeks) can lead to overruns

So how do you get timesheets submitted?

Once employees understand the importance of timesheets, there are a variety of ideas to get those timesheets submitted accurately and on-time.  Some have suggested withholding paychecks until a timesheet it submitted, but know that there are laws that protect employees for non-payment due to lack of timesheets.  There are other ways for companies to incentivize employees to take care of this function.  First, after you’ve explained the importance of timesheets, you could try some of these serious (and perhaps not so serious) ideas.

  • Give late employees a paper check instead of the more convenient direct deposit.
  • Make timely submission a portion of the performance review process.
  • Incentivize positive behavior by offering awards for consistent timely submission – gift cards, paid days off, office lunch, etc.
  • A lawyer, William Peacock, describes one solution he knew:

One firm installed a kegorator with a homemade card scanner that checked to see if the timeslip had been submitted. If so, employees could pull a pint, reported AdWeek.  Did it work? Oh yeah. Timesheet completion was up 90 percent.  People drinking in an ad agency -- that's a novel idea, [but] is there any way this is a Bad Idea? No. Heck no…In all seriousness though, a lot of businesses freak out when alcohol is involved. And it's for good reason: injuries, social host liability, sexual harassment, general stupidity -- whatever. We'd venture a guess that the automated dispenser only put out once per timesheet. Giving someone a single beer as an incentive is one thing -- throwing a full-on kegger is a whole different (and legally dangerous) matter.

Glad we’ve figured that out!

Despite all these ideas (including Michael Scott’s “buying them stuff”), the absolute best way to get employees to submit accurate and timely timesheets is to make sure you have the most efficient timesheet system in place.  Making the process clear, understandable, and efficient will ensure that you get those necessary timesheets making your firm, once again, a smooth sailing enterprise. 

Photo Credit: NBC

 

Deltek Vision custom solution, Daily Timesheet Reminder

 

Topics: Deltek Vision

Open Architecture - Why It's Good for Professional Services Firms.

Posted by Wendy Gustafson on Wed, Mar 04, 2015 @ 02:05 PM

open architectureAmong many things, today’s professional service firm managers are constantly striving for the most effective and efficient way to operate their business. They are inundated with data and, while reviewing latest financial results, finding the right business indicators for planning, understanding modern marketing trends and, of course, keep up with technology – simply managing the business can fall through the cracks. If your business is thriving, then it is evolving, and you need technology that can keep up with it and keep your business moving ahead. Enter open architecture (OA).

What is Open Architecture?

Open Architecture is when a systems specifications are accessible and allows further system development. Additionally, systems that allow an application programming interface (API), new system features can be developed and integrated with other software.

How Can I Benefit?

  • Flexibility – Your business is unique. Although you may perform similar functions as other professional services firms, how you conduct business is uniquely – you. The reality is there is not one system “out of the box” that completely provides everything for your very individual business needs. Finding a system that gets you most of a specific functionality is one thing. Finding a system with an open architecture allows you to meet the specific functionality and meet the special needs of YOUR business is quite another. A system with open architecture will allow you to customize the design (both in processes and fields for data collection) to meet your specific needs
  • Efficiency – Time is precious (not to mention expensive). Open architecture systems allow you to reduce duplicate entry and incomplete processes – reducing errors and omissions. When your software systems “talk” to each other (for example the information from your opportunity system automatically converts to a project when awarded) the data is automatically transferred between the systems eliminating the needs for staff to duplicate entry and reducing errors. You can also build in validation requirements to ensure YOUR business process is followed.
  • Connectivity – Access is important. You need your data regardless of which system you’re looking at or when you need it. An open architecture system will share your data with other systems and allow you seamless access to it. For example, when you are awarded a project that meets certain requirements that project information can be automatically uploaded to your website – keeping your site relevant to YOUR business.

Don’t take our word for it

Now that we know what open architecture is, let’s talk specifically about how an OA will help your professional services firm. An ERP like Deltek Vision allows even those with limited IT knowledge to customize and build business intelligence processes through the use of workflows

Let’s say during your sales cycle when you change the stage to “Awarded” you typically have a series of other fields and processes you have to go through. A workflow can trigger those processes:

  • Change Status to Sold
  • Change Probability to 100%
  • Change the Date Closed to Today’s Date
  • E-mail Accounting to open a project (or even allow the system open up a project)
  • E-mail Marketing to advise a new project was won

Duplicated or unnecessary efforts equates to lost time. Alternatively business processes that are not followed can spin cycles down the road (that is why the process is there in the first place – right?). Many of these items are easily resolved through workflows where some can take advantage of the flexible software solution already available, while others may need to take it to a higher level to tailor to their unique requirements. The possibilities for innovation are limitless with a system that has an open architecture.

Don’t Go at It Alone

While technology fads come and go, it can be hard to tell which ones you should ignore and which you should embrace. The benefits of open architecture are clear – flexibility, efficiency and connectivity. But don’t go at it alone – you have better things to do with your time then sifting through mounds of technical documents – reach out to your friends at Full Sail Partners to consult on how open architecture can make you shine.

 

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Topics: Technology Solutions, Deltek Vision

Management of Change: Human Resource

Posted by Wendy Gustafson on Mon, Nov 17, 2014 @ 01:00 PM

management of change hrOur Management of Change series culminates with this final and very important piece.  In discussing change management, one concept keeps bubbling to the surface as the very keystone of change, the very bedrock upon change is founded … the people.  And who better to understand, to nurture, and to create an environment where change is embraced than Human Resources.

The People

Organizations are too often considered a maelstrom of things like spreadsheets, market positioning, business offerings, and business process tools.  But in reality, organizations are truly the embodiment of the people who work there.  Each individual is both 1) a distinct, individual working personality and 2) a significant piece of a whole.  And because the leaders of organizations recognize the importance of people, the human resource function plays a vital role.  Inc.com tells us: 

Essentially, the purpose of HRM

is to maximize the productivity of an organization

by optimizing the effectiveness of its employees.

The key of this definition to note:  in order to continually “maximize productivity” and employee effectiveness, the organization, i.e. the people as representatives of the organization need to embrace change.  

The Method

How? - that’s the big question that keeps coming up.  How do HR professionals help engender a culture that accepts and supports change?  It really comes down to two steps:

1) Hire the right people

One of the main jobs of HR is hiring the right people for their organization:  people who will pick up the banner and personify all that their organization holds dear including an understanding that change is inevitable and good. 

2) Know your employees

But it’s not just getting the right people in the door, it’s knowing those very employees: recognizing their strengths, understanding their weaknesses, and appreciating both.  No one should hire employees who aren’t good at their jobs or who don’t feel good about doing them.  HR, then, must contribute to identifying and taking advantage of their employees’ strengths, so that employees are comfortable in their ability to contribute and are trusting that their leadership sees and values them.   People resist change for a variety of reasons but high among them are a) change is too hard, and b) they are afraid.  But where employees are valued and have trust in their leadership, companies can create a stimulating environment where change is welcomed.  

The Change

We have discussed that the very backbone of every organization is the people, the right people recognized and valued for who they are and what they are good at.  With change, leaders tend to

… focus their attention on devising the best strategic and tactical plans. But to succeed, they also must have an intimate understanding of the human side of change management — the alignment of the company’s culture, values, people, and behaviors — to encourage the desired results. Plans themselves do not capture value; value is realized only through the sustained, collective actions of the thousands — perhaps the tens of thousands — of employees who are responsible for designing, executing, and living with the changed environment.” 

In every company, HR’s role is to function as the “grease” if you will between the goals of the organization and how the people in the organization contribute to achieving those goals.  According to Changeboard.com, a Global HR Community, the four primary HR roles in change are

• Change leader/owner, taking full responsibility for the planning and implementation of their own change project.

• Change educator, bringing specialist knowledge and expertise to help [people] understand more about the structure and process of successfully managing change.

• Change advisor, working with [people] directly through the process of designing and implementing change, challenging and guiding them to get it right.

• Change participant, being part of a change that affects them personally.

The End

It’s easy to make changes to spreadsheets, to goals, and to bottom lines.  But it’s hard to change people.  It’s hard unless you have the right combination of satisfied, challenged and valued employees and with the help of professional Human Resources organizations who are aware of their role, change can be easy … well, easier.

 

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Topics: Building Business

Payroll Software: Pain in the A$$ or Necessary Evil

Posted by Wendy Gustafson on Wed, May 14, 2014 @ 09:00 AM

PAYROLL SOFTWAREPayroll, the reason we drag ourselves out of bed and into the office.  Payday!!  Everyone’s favorite day – it is especially nice when it is on a Friday.  As happy as payday makes us, if you are the one stuck processing your payroll software can be a total PITA.

Utilize In-House Payroll Software vs. Out Sourced Payroll

So why process payroll in-house?  Why not just hire a service?  In many cases a service is exactly what you would use.  However, payroll services have their own set of challenges:

  • Rigid deadlines that may cause you to process payroll days before your pay date (in some cases before the pay period ends)
  • Inability to add non-payroll items (like expense reimbursement) to the payroll
  • Can be a bit more “pricey”

When looking at a way to process payroll in-house, a system that integrates with your existing ERP system, such as Deltek’s Vision, is priceless.  You can have a one stop shop for employee set up, employees can enter their time and it is automatically available in payroll when posted.   Since everyone is already used to the system, the basic information is already there.

Some of the other benefits of having payroll in-house and integrated with your ERP are:

  • Employees will have access to see their vacation and sick time remaining
  • Access to see and print copies of their paychecks (Meaning you don’t have to provide their last 5 paychecks)
  • Accounting can control deadlines
  • Can sometimes be less expensive

What to Look for in Payroll Software

If you determine that in-house is the way to go, it’s important to make sure your payroll software is flexible and provides the features that matter.  So what type of flexibility should you look for in your payroll software? A couple features include the ability to add codes when you need it or to track your company contribution to the employee benefits.

An example of an additional code is the ability to add an after tax code to reimburse your employees for expenses.  This allows you to provide your employees one check for payroll and expenses.

An example of a contribution code would be if you offer a 401K plan, the company match is your company contribution.  If you offer health care, the portion covered by the company is the company contribution.  Tracking this information on each payroll can simplify your accounting process (getting the costs into the right “bucket”) but can also allow you to easily create a total compensation report at the end of the year showing the employee the total value of their compensation package including benefits (not every service offers this either).

Either way you go, an in-house payroll software or outside payroll service, look for the process that will provide you the most flexibility and integration with your current ERP to make your life easier!

Deltek Vision ERP

Topics: Accounting, Deltek Vision

7 Ways Your Team Can Improve Project Collaboration

Posted by Wendy Gustafson on Wed, Feb 12, 2014 @ 09:00 AM

group collaboration, team collaboration, improve collaborationWhen you improve project collaboration, you improve your organization’s ability to develop innovative products and processes. What are some specific strategies you should employ to get to a more collaborative environment? 

1. Focus on goals. The most effective project collaboration tends to be aimed at a specific goal or goals. So a natural place to start the process is with a discussion of the pain points/problems for a given project that the team is trying to address. Starting in this way ensures that team members share a specific understanding of what success will look like, and also makes it easier to take periodic measurements of the team’s progress and compare it against the established goals. 

2. Create small, diverse, nimble teams. The best way to encourage collaboration on a team is to keep groups small and diverse. For inspiration, consider that one of history’s most prolific inventors, Thomas Edison, liked to organize his people into teams of 8 or less that included a variety of disciplines (his light bulb team, for example, included chemists, mathematicians, and glassblowers). Fortunately, collaboration tools on the market make it easier than ever to include team members not only from different parts of an organization, but from different parts of the world. 

3. Build trust. To improve project collaboration, it’s crucial for team members to trust and respect one other. In a similar vein, they must be sure that management is supporting them, providing the time needed for collaboration, and giving credit where it’s due. If you’re assembling a team with members who are working together for the first time, consider team-building exercises that allow the members to get to better know each other and their work/communication styles — building cohesion and trust in the process. 

4. Choose appropriate tools. We live and work in the age of the app — and that’s good news for organizations that are seeking to improve project collaboration. There are many software tools that empower collaboration — not only widely-known ones such as DropBox that facilitate file sharing, but also other, lower cost (and even free) tools for screen sharing, real-time chats and IMs, scheduling and more. Click here to read about our five favorite collaboration tools. 

5. Appreciate different approaches to technology. Ultimately, you’ll want your team members all using the specific collaboration tool or tools that you select, for ease of management and cost effectiveness, if nothing less. That being said, it’s helpful to keep in mind that not everyone may be ready to adapt to the new technology at the same time (“hey, what’s wrong with me just collaborating via e-mail?”). Be realistic, and build a process and schedule that allows time for bringing every member up to speed on the new technology. 

6. Allow sufficient time for success. Evolving to a more collaborative environment is not a simple or quick process. Rather, it requires changes in not only how group members work individually and together, but also in the level of trust that the individuals have in each other and in management. Try to manage expectations in such a way that you maintain enthusiasm for the new possibilities the process will enable, with the realism that success will not come overnight. 

7. Effectively capture information and ideas. Last but not least, make sure your have a system to capture and store the group’s collective work, as well as individual members’ contributions. Unlike using simple email for communication among team members, the leading collaboration tools create central repositories where communication and documents can be archived for later referral — a very useful capability to have throughout a project, but especially when a key team member leaves. 

Gentlemen (and ladies), start your collaboration engines!

Collaboration may seem like just another corporate buzzword … but for the most part, the strategies underlying it are not too different from your other tried-and-true business practices. By carefully establishing and guiding your project teams, equipping them with the most effective collaboration tools, and managing expectations appropriately, your organization can be on its way to far more innovative and responsive products and services. 

Ready to begin collaborating as a team? Read our below blog to learn how to work more cohesively:

 

Team Collaboration Techniques

Topics: Collaboration Software Tool, Project Management, Building Business

Four Biggest Hazards of Forecasting in Excel

Posted by Wendy Gustafson on Thu, Dec 05, 2013 @ 08:04 AM

Forecasting in ExcelWe all love this this time of year when EVERYONE (in management at least) is coming at you to peer into the crystal ball to see what the upcoming year will bring -- everyone else is simply wondering if they will get a holiday bonus. With all of the tasks ahead for year-end, you may feel as though you will be lucky enough to make it to the New Year, let alone forecast what is going to happen!

Budget, budget, toil and fudge it (not as well-known as bubble, bubble, toil and trouble, but more appropriate). 

Most often you are expected to reach out to everyone in the firm to pull together a web of disparate “visions” for the various divisions of the firm, get buy in from everyone, set pay rates and bill rates, set annual goals for every person in the firm and publish your findings so that everyone can have proper “visibility”.  Just when you have it all together and about ready to go, someone transfers or quits or gets hired and everyone wants to you to “simply update the budget”. Fun times – just before the holidays. Unfortunately, if you are attempting to manage the undertaking of forecasting in Excel, you are causing yourself unneeded stress in an already stressful situation!

What are some of the hazards to be aware of when forecasting in Excel?

Multiple Spreadsheets – Typically when creating a budget in Excel you end up with multiple workbooks, at a minimum one for every department that will then roll up into a firm-wide budget.  And in each of these workbooks you can have multiple spreadsheets to total up the workbook (maybe a spreadsheet for each service type or for each employee).  As you move these workbooks, you run the risk of breaking links within each individual spreadsheet.

Changing Dynamics – When you create your budget workbooks, you usually create them to “map” the way the firm currently does business.  For example, at an AEC firm, the Survey Department staff only works for the survey department and the Water Recourses staff only works for the Water Resources department.  The issue is that the department heads might have hatched a plan to share resources to maximize efficiency. But if you have all your workbooks mapped out and they come back with their scheme you will need to “revamp” all your work.

Oops, I Forgot – When you created your workbooks you simply forgot a chart of account numbers or forgot that management wanted to add an employee in the corporate office.  Once you have everything mapped, if you have to add something, you run the risk of breaking links (bad) or creating incongruent links (worse).  An incongruent link would be adding a row in the Survey Department called “Survey Supplies” but forgetting to map to the row in the summarized data called “Interest Expense” because the Survey Supplies is only in the survey department and Interest expense is only in the corporate department.

It Doesn’t Add Up – So you have everything set-up and summarized and you have an acceptable profit.  However, when you pay closer attention, you realize that in January, the sum of your departments properly add up.  Somewhere, something is broken.

What can you do to avoid or mitigate these hazards?

Meet Early – Before you even get started down this long road of forecasting in excel, try to meet with the department heads to get an idea of changes they may have planned or discussed.  If you have suggestions for them to be more efficient (for example work share), get it out there for discussion and resolution before you get too far down the usual primrose path you find yourself following year after year.

Share Information – First figure out if there is truly a place where you can put your workbooks, create the links, and share with the appropriate staff.  This could simply be a shared drive in your network.  If you need to limit access for the workbooks (for example the San Francisco Engineering department head can only see the San Francisco workbook), this can be achieved via the “password protection” in Excel (found in File/Protect Workbook/Encrypt with Password).  Be sure to make a list of passwords for each workbook because if you lose them, you have completely lost your ability to use the workbook.

If you can’t create a shared drive, use your personal drive to save your workbooks until complete. Then you’ll want to only print final data. 

Having links break when you move your workbook is frustrating.  If you do have to move workbooks or update tab names, you can use the Update Links in Excel (Data/Edit Links/Update source) to get the correct mapping.

Be Consistent in Your Workbooks – Use the exact same chart of accounts and structure for each workbook – even if the information doesn’t apply to your department.  If you are consistent in your account listing and your workbook structure you do not have to worry about incongruent data.  If you realize you have to add an account number, make sure to add the account in the same row in every workbook and you can update your summary easily.  If you have utilization in your engineering department, have it in Corporate –even though it doesn’t apply – makes it easier to simply copy and paste formulas throughout the entire summary workbook.

Create Summary Rows/Columns – In your summary workbook, when you have subtotals in rows or your grand total column, use the column/row formulas to calculate these; DO NOT use the sum from the individual workbooks.  However, after your Total Column, add a column that adds the total columns from the individual workbooks to compare your results.  This will allow you to see if there is a mistake in any of the individual cells.  Also, at the bottom of your summary workbook, add a section that shows the profit from each department.  This should add to the total in your summary. If it doesn’t, then you may have to do some research into what is causing the issue.

We hope that the above tips help you avoid some of the most common hazards encountered when accounting and forecasting in Excel. With year-end approaching quickly, best of luck getting your accounting and forecasting in order, so that your firm can ‘excel’ in 2014!

If you are interested in taking your accounting and forecasting functions to the next level, check out Deltek Vision, the industry leading Enterprise Resource Planning (ERP) software for A/E and Professional Services Firms!

 

Deltek Vision ERP

Topics: Accounting

3 Core Strategies for Financial Forecasting

Posted by Wendy Gustafson on Wed, Nov 20, 2013 @ 09:40 AM

Business leaders have any number of sophisticated computer programs and models to help them predict future business results. Despite these resources, however, in its essence financial forecasting is still a guessing game. 

That being said, there are several fundamental strategies that can improve one’s chances of making accurate forecasts.

Strategies for Financial Forecasting1. Understand how and where you’ve succeeded.

The first strategy is to look at historical data to gain insight into exactly where past successes and challenges have come from. This inquiry includes reviewing the various sources of your leads, how your sales team manages them, and where you tend to have the greatest success. For example, you might try to determine:

  • Whether your sales most often result from calling into existing clients to find additional work, from cold calling to purchased lists, or alternate sources.
  • The extent to which your success has depended on the person doing the calling, the script used for the call, the number of contacts made, or other factors.
  • The lasting impact of sales — i.e., which sales turned into continuing relationships and additional work. Of course, there are many factors that affect this statistic, but it can still provide useful insight for your financial forecasting. 

The key is investing the time and energy needed to gain fact-based insights into what has worked — and not worked — in the past.

2. Take a cold, hard look around you.

A second essential strategy of financial forecasting is to look closely at your current operating environment, and conduct a brutally honest analysis of your strengths, weaknesses, threats and opportunities (SWOT). 

Your SWOT analysis should begin with a realistic exploration of the many factors that could increase, or decrease, the likelihood of your success. Some questions you might want to answer:

  • What is your reputation in the marketplace — what are you known for doing well, and where should you try to improve?
  • Is the local or regional economy growing, stagnant, or shrinking? More specifically, what is the condition of the economy as it affects your clients?
  • Are there factors that could encourage your clients to maintain or even expand the services they are buying from you? Are there conditions that might threaten projects that they have planned with you but not yet started, or that could prevent them from engaging with you in the future?
  • What is your competition doing to take advantage of the current market? Where are they weak, and how can you exploit that weakness? 

The underlying strategy in doing your SWOT analysis is to be totally honest and realistic about where you excel and where you come up short — and determine what you can realistically achieve in your competitive environment. 

3. Test your assumptions and adjust as necessary. 

A third essential strategy in effective financial forecasting is to track and monitor your results. There is a range of ways to do so, but based on our experience working with professional services firms, one of the best is to invest in a purpose-built ERP such as Deltek Vision. This solution can provide a firm with up-to-the minute, comprehensive visibility into all of the assumptions and results related to its financial forecasting. Just as importantly, it connects and organizes data from both the front office (i.e., project) function as well as the back office (accounting), and automates a wide variety of essentially manual processes — including Customer Relationship Management (CRM), business development and more. Not only will the insight you gain help you tweak your assumptions to improve future forecasting efforts, but more importantly, you can make midcourse corrections to keep your firm on course. 

Keep your eye on the prize.

Whether you use one-off spreadsheets, software programs for specific functions, or a comprehensive solution like Deltek Vision, the key is to collect metrics that matter to you on an ongoing basis, measure results against your financial forecast, and make adjustments as necessary. 

You’ll never be able to see a completely accurate view of your company’s future. However, through financial forecasting, you will gain enough of a realistic sense of what’s coming that you’ll be able to stick to a plan and outmaneuver the competition. 

 

KPI, Measuring KPI, Establishing KPI

Topics: Accounting, Building Business, Professional Services