Full Sail Partners Blog | Wendy Gustafson (2)

Posts by Wendy Gustafson:

Is Forecasting Software Magic Voodoo or Tool for Planning the Future?

Posted by Wendy Gustafson on November 13, 2013

softwareforecastingHow many times has it happened, you are cruising along thinking all is going well.  All of a sudden wham, utilization is dropping like a stone.  How did it happen?  You were doing all the right things -- meeting with your clients, looking at Work In Progress, and asking staff all the right questions.  Executives and accounting are looking at you to explain what is going on, but outside of saying “well things will get better” – can you provide an answer?

The Magic of Forecasting

One thing you probably weren’t doing was forecasting for the future.  What?  That sounds like accounting voodoo – right?  Well kind of, but it isn’t magical and it isn’t just accounting folks who need to do it.

Anyone who is responsible for production staff needs to understand what their staff is working on currently, AND what they have coming up for work.  When there is excessive “downtime” we need to fill that time for staff.  When there is excessive “overtime” we might need to look at how the workload is allocated. A good system of project budget and forecasting is necessary to have that visibility. 

These steps can be used with forecasting software to help plan for the future:

  • Create a process. The process of creating an initial budget, even for time & material projects, when the project is signed (you DO get signed contracts – right) is just the first step.   You must also have a mechanism of reporting actual results against the budget on a regular schedule.
  • Update the budget for changes.  These changes usually come in the form of scope change orders and additional services.  These changes will add increases to your budget and you will have to report actual against them.  If you are not diligent about getting authorizations for scope changes or add services, then you run the risk of running out of budget by the end of the project.  Your client is quite often experiencing temporary memory loss at this point about what they asked you that was outside of contract. 

Bring it all together

So you and your managers have all initial pieces of the puzzle - Initial Budget, Scope Changes, and Actual Results.  Why do you still feel out of control and have surprises? 

You need to pull all this information into one centralized location, have the ability to update “on the fly”, and have actual results map to your budget.  A forecasting software, like Deltek Vision can help you to pull all this information together into something than can be easily updated and allow visibility into the upcoming workload and expectations for the future.  You can then use the “remaining budget” to forecast out for the next month, 3 months, or even year to avoid those nasty unexpected drops in your staff’s utilization. 

However maybe your initial budget assumptions were incorrect and you need to change the expectation of the end of the project.  A forecasting software will allow you to update the ETC (estimate to complete – this is what you EXPECT it to take to complete the project – not what you have remaining in the budget).  This provides a better picture of what you need to forecast over the timeframe you are forecasting. 

Once you have the above process in place, it is easy to review what you expected vs what you actually performed and what you have left to do.  This provides you the ability to plan for the slow times and the busy times.  It also provides you credibility when reporting to executive management or accounting what is going on in utilization or over the next few months.

What else does all this tracking get you? 

It helps you to establish how long it REALLY takes to complete a project – which is vital information for the future. It also helps you understand what should be included in your scope vs. what is an additional service.  Many clients would prefer to know the costs up front and if you can include these items in your scope and present a “total package”, your firm just went to the front of the pack. If you can get to the point that you budget and forecast (and yes people do this) beyond the project and down to the employee level, you can easily identify what employees are efficient and what employees may need further training.  All this information combines to make you a more knowledgeable and successful project manager. 

New Call-to-Action

Top 6 Financial Performance Metrics to Monitor for a Healthy Business

Posted by Wendy Gustafson on August 07, 2013
Key Metrics, Financial Health

As an executive in a professional services firm, you have many demands on your time.  Many times you are pulled into client conferences, HR issues, and day-to-day “how-to” decisions.  With all the distractions, how do you continue to monitor your business health?  There is a plethora of financial performance metrics to help you monitor your company’s financial health. 

Most financial performance metrics are “lagging indicators”, with the exception of the backlog.  Meaning that they are a great indicator of how you performed (past tense). Unfortunately, you can’t control or affect change. The benefit of tracking lagging metrics is that it gives you the ability to change course to impact the future.  Since lagging indicators are based on actual performance, even if you haven’t been tracking these metrics, it is pretty easy to go back and get the information (accounting people everyone now hate me). In an upcoming article, we will discuss leading metrics. These metrics help your firm know where you are going therefore allowing you time to change course.  

When reviewing your financial performance metrics, it is important to understand how other firms in your industry compare.  If you consistently have a 3.00 direct labor multiplier, that may be good – and you may be profitable, but if everyone else in your industry consistently has a 3.75 multiplier, that would tell you that you need to review your bill rate structure.  Perhaps you can do even better in profits!  Several companies (PSMJ comes to mind) queries companies and publish trends on financial metrics.  Check out our past article: The Business Benchmarking Process: 4 Key Steps on this topic.

There isn’t one metric that is the “magic bullet” of reporting your company’s health (sorry to say).  Profit will tell you if you “made money” – right?  But it doesn’t tell you how you made that money and where your weaknesses are.  

Here are two examples to help illustrate:

  1. Your production staff may have a 95% utilization (i.e. 95% of the time at work is spent on production projects), but if you do not have an effective multiplier high enough to cover your indirect and overhead expenses – that utilization will not translate into profits.
  2. Your profits can be soaring but if the days your Accounts Receivable is outstanding is growing, you are not translating your profits into cash. 

Using a combination of metrics identified below can help determine if your firm is making money, but equally important, how you are making the money.

  1. Profit Well duh you say, however, you would be surprised at the number of business owners that watch their profit numbers dwindle while making excuses or “hoping” it will simply turn around.   Your profit is your way of ensuring that your revenues are exceeding your costs.   While one month of poor profit performance should not send you to the stratosphere of worry, a two to three months trend of poor performance should start you down the path of inquiry as to the cause and solutions.   Profits are tracked both as an amount and as a percentage of your revenues.  
  2. Cash Flow Cash is king as they say!  Profit on an accrual basis is a nice indicator of the work your staff has performed, but if it never translates into cash then you really are not ahead of the game.  If you are not collecting on your billings, then you aren’t really making money – regardless of what your financials say.  Cash inflow is what supports your ability to pay your bills – including your employees – timely.  Again, if you have one month of poor cash flow, then you probably don’t need to get too excited, but when you see this beginning to trend downward then you need to research.
  3. Average Days outstanding – This is the indicator that you are collecting on what you bill which directly affects cash flow.  So if your profit is looking good, but your cash flow isn’t, this might be a good place to start looking.  As your AR ages, you are not putting that money back into your cash flow – keeping in mind you have typically already paid your employees.  Clients that usually pay on-time do not suddenly start paying late for no reason.   When your average days outstanding begins to grow, this could be indicative of your clients perceived service quality had decreased.  It is in your best interest to identify this issue and correct it immediately.
  4. Utilization For professional services firms, what you sell is your employee’s time.  So it is important to keep tabs on what your staff is doing.  If this number is steadily decreasing, then you can bet your profits are also decreasing.  This number is affected by the amount of non-production work that is being assigned to production staff.  If your production staff have billable work to do, and have also been assigned high priority non-production work, then utilization can be affected in the short term. However, as soon as the non-production work is complete, it should fall back into line.  If however, your staff is doing non-production work because they do not have production work to do that is also whole different story.  Anytime your utilization slips, it is worth an inquiry as to the reason and the finding a resolution.
  5. Effective Multiplier  This is the ratio of your net revenue divided by your direct labor costs.  This lets you know how much money in revenue (and hopefully cash inflow) you can expect for every dollar of direct labor you spend.  This multiplier affects your ability to cover your indirect and overhead costs as well as meet profit goals.   This ratio can be a reasonable number, but if you do not have enough hours utilized on production projects, you may still not be profitable.
  6. Annual Net Revenue in Backlog Backlog is the dollar value (expressed as net revenue) you have contracted for, but not yet performed.  When you create a ratio of backlog over your 12 month net revenue, you can use that ratio to calculate how many days work you have under contract.  This is a forward-looking metric and the only one mentioned that looks to the future.   Focusing strictly on past financial performance won’t prepare your firm for if there is a downturn looming (i.e. low backlog) or more work than your existing staff can handle.

Remember, each of the metrics above is just one piece of the puzzle to your firm’s financial health.  You can’t take just one as your company gospel. They are interrelated and play on each other. 

Financial performance metrics are typically calculated monthly and reviewed.  However, they can also be reported only a quarterly basis.  Sometimes, people decide based on how things are trending.  If your metrics are trending up then focus on them quarterly.  If your metrics are instead trending downward then switch to monthly.  Work with your accounting staff to have these metric prepared for the past several months/years allows you to get an idea of past performance and decide how often you need to review. 

As you get to know the above metrics and understand their interrelation you will be able to quickly identify when your company is going ‘sideways’ and understand the action needed to adjust your course accordingly.  Check out this past webinar to see how your firm can become ‘Best In Class’.


Financial Performance Metrics

What is a Workflow: Automate Your Deltek Vision System

Posted by Wendy Gustafson on July 30, 2013

deltek visionHere we are ½ way through the year, and yet my ‘to-do’ list has kept growing.  In today’s economy we have all been asked to do more with less help.  This often requires us to take on more responsibility and daily tasks - which causes us more stress, longer hours and greater chances to ‘mess up’ -  so to speak.

What to do? What to do?  Through workflows, Deltek Vision offers us an opportunity to automate many of the repetitive tasks we have to do every day – that quite often fall through the cracks of our busy, busy days (and hopefully not too many nights).

What is a workflow? 

You might ask, what is a workflow? Workflows are actions that your Deltek Vision system will carry out for you based on events that occur within specific Info Centers.  An example of this is sending an email to an employee when their name is added as the Project Manager on a project.

Can I do this?

In many cases you can do a lot of the automation on your own.   Deltek's intuitive design allows “non-programmers” to create workflows and actions for many repetitive task. 

To do this, you will need to know a couple of things.  First – where are workflows found?  They are found in Configuration --> Workflows (guess that wasn’t too hard).

Next you need to understand the different options under workflows. Watch this highlight video to better understand the options under workflows, and the actions that can be performed: 


So you see that using the standard workflows in Vision can help you with many repetitive tasks that are triggered from actions taken within Vision.  Making these automated will free you and your staff up to pursue more productive workdays and more fun nights.

But wait you say, how do I actually set up these workflows? That's a great question!  If you still are asking, what is a workflow, watch the full length video on Workflows and Stored Procedures. Learn how to set up workflows in your Deltek Vision system today! 


What is a Workflow



What Does ERP Mean - Jargon Buster

Posted by Wendy Gustafson on April 24, 2013

SaaS, ERP, CRM, LOL blah, blah, blah. Today everything seems to be reduced down to acronyms, to fit into our fast paced instant message, text, and Twitter world.  However, many times we can be left out of the story because we don’t know what they mean.  So, what does ERP mean and what are some of the common related terms? To help you decipher this business jargon, let’s discuss what it is and how it can help firms.

What does ERP meanERP – Enterprise Resource Planning is a system facilitating the flow of information between all business functions, from your Finance and Management Accounting to Project management, Client Relationship Management (CRM – see more below), Human Resources, Inventory and Purchasing. 

The benefit of an ERP is your business efficiency can improve dramatically as all your business processes are automatically synchronized.  The real-time functionality allows for upper management to react quickly to changing dynamics in the company and the economy. 

Some of the characteristics to look for in a “good” ERP solution are:

  • Operates in “Real-Time”, reflecting what is going on with your business now
  • Database that supports all applications and allows for minimal duplication of efforts
  • Consistent interface throughout the system for ease in training staff

SaaS – Software as a Service is a software model where the software and data are centrally located on the “cloud” (see below).  SaaS solutions are typically accessed via a web browser allowing access from any location.  SaaS solutions have become popular over the last several years.

Some of the benefits of a SasS model are:

  • Easier administration at the client level as all updates, and patches are handled by the provider on a timely basis
  • Management of the data back-ups
  • Subscription feel providing a lower up-front investment compared to traditional software models

CRM - Customer Relationship Management is a model for managing a company’s interactions with current and future customers.  A typical CRM system will synchronize sales, marketing, customer service and technical support (if applicable).

Some benefits of a CRM system are:

  • Identification of top clients allowing for better customer service focus
  • Increasing information sharing between employees
  • Allowing systems to track client contacts
  • Providing visibility into sales and marketing efforts

SQL – Structured Query Language is a programming language that allows access to and management of large amounts of data. The data is stored in a relational database and offers the user the ability to manipulate and view the data in various ways. Efficiency is the main benefit of a relational database as the data can be easily formatted providing ease of grouping and comparison.

Cloud refers to using the internet to access programs and data.  Operating in the cloud has some real advantages in that you can access your data anywhere at any time and the cost of maintaining local hardware and operating systems are reduced (somewhat replaced by the cost of the cloud operations).  Some concerns are ensuring data integrity and security, reliability, limited customization and latency.  Be sure to check out this whitepaper for more information about the cloud.

Project-Based ERP is an ERP system built to meet the needs of project-based industries.  Project-based industries generate most of their business via individual projects (as opposed to producing widgets).  A project-based ERP will allow managers to track the life-cycle of individual projects from the initial proposal through project close-out.  This allows management analysis of the success (or challenges) of individual efforts, apply best practices and come up with a company policies and procedures.

Open Architecture refers to the ability to add-on, customize or upgrade components of existing system software.  Software that has open architecture publishes or makes available its structure allowing for developers to access and manipulate.  In some cases this allows direct access via an OBDC (yet another acronym meaning Open Database Connectivity) connection or information sharing via an API (Application Programming Interface). 

Of course this is only a snapshot of what you hear out there. Hopefully it will serve as a starting point so you expand your research ERP.  New terms are created daily (just check any 15 year olds text messages to see) so this may be obsolete by the time it is published.  However, it does help you get a handle on the terms you have heard on the news, business reports, and around the office.  And now when someone asks you ‘What does ERP mean,’ you’ll have the answer!

Deltek Vision Tips: Custom Info Center for Human Resources

Posted by Wendy Gustafson on March 11, 2013

Many of us in Accounting have to wear a dual hat of the HR manager.  Somehow it is assumed that accounting experience qualifies you to manage the HR process.  Why?  Perhaps it is due to the portion of HR that involves risk (employment laws are everywhere) or perhaps it is the crossover between HR and payroll. 

Outside of payroll, there isn’t much crossover between the two jobs. Further blurring the issue, an increasing amount of firms are utilizing third party payroll services.

For the true HR part of the job, we create spreadsheets to track and review timelines and employment metrics.  We struggle to keep track of employee initiatives and job metrics.  Most employee reviews are a reflection of their performance over the last couple months at best as managers often forget successes or failures earlier in the year.  Job descriptions are vague and associated with metrics that are difficult, if not impossible, to measure objectively. Employees are often dissatisfied if they receive a positive or neutral review without an increase in compensation. 

So what is the answer?  We can use our Deltek Vision System to assist us.  

Some items are relatively simple.  Utilize user defined fields to track the next review date and have a scheduled workflow send a reminder to the manager and yourself.  You can set up a user defined grid to allow tracking of an employee’s pay/position history so that it is easy to track the changes through the years.  All of this is helpful, but it really doesn’t solve the full problem.

With the advent of Vision 7.0 and User Defined Info Centers, you can go many steps further.   Utilize a combination of User Defined Info Centers, User Defined fields, standard workflows and scheduled workflows, to set up HR, and review tracking system managed from within your existing Vision system. 

How would something like this work?

You can create a user defined info center to house your employee job descriptions.  These job descriptions can contain the measurable metrics for the job along with overall core competencies.

You then create a “review form” using user defined fields in the employee info center.   A stored procedure will allow you to pull the employee metrics and competencies into the employee review tab.

After the review is complete, results can be stored in Vision and reviewed later. 

Stored procedures can update a tracking grid for the employee so that historical review scores can be seen at a glance.  You can also use grids to provide places for managers to track employee’s progress throughout the year.

User defined fields, grids, workflows & stored procedures - Is all that really necessary?  Not really.  All this can continue to be managed in various worksheets, word documents and calendars. 

The system above simply allows all of the disparate parts of an employee review/compensation/current and long term history to be maintained in one place.  Also, the beauty of using Vision and User Defined elements is the ability to customize your HR procedures to your company needs.  I mean it IS by definition “User Defined”.

 Deltek Vision Custom Info Center for HR
















So what are some tips for an effective HR process?

Whether you decide to automate your HR, or keep up the use of spreadsheets,  there are some things you can do to make your HR processes more effective:

  • Create well defined job descriptions and make them available to employees.
  • Within the job descriptions, define the metrics by which employees will be measured.  Ensure the metrics are specific. For example, the Project Managers will ensure work authorizations for every additional service provided to clients.
  • Have a well-defined review policy.
  • Separate the review schedule from the schedule for raises.  Raises are given, not only on performance, but on budgetary restrictions.  This removes one level of angst from the reviews.
  • Provide managers a place to keep track of employee successes and failures.  Allow employees to update their successes and failures also.  This allows the employees to be more active participants in the process.

Has your firm utilized the Custom Info Center? If so, in what ways? Leave us a comment.  Not on Deltek Vision 7.0 yet? See how our firm can help you transition to 7.0.


Don't Forget Your Deltek Vision Year End Processes

Posted by Wendy Gustafson on November 30, 2012

Deltek Vision, Year End ProcessAs we come into the holiday season many of us in accounting face the coming season, not only with the joy of family and friends coming together, but with a sense of impending dread – YEAR END and TAX SEASON are looming – ugh - have another drink.

W-2s- 1099s- journal entries- checking and double checking each number!  Auditors- shareholder meetings- endless explanations’ of what the results mean (even though you have been saying for the past 6 months)  - Oh the joy of the season.

As we go through the year end process there are mistakes we (and others) make that are easy to recover from like entering the 15 page depreciation journal entry “backwards” at midnight sitting in your semi dark office chugging your 15th pot of coffee.  Some are more difficult – like removing all the lower levels of your work break-down structure (did that once – glad our backups worked). So outside of deleting the database, what are some of the items in Vision year end processing that are hard to recover from:

1099 Initialization

When to run
After the final check run for the current year, but before the first check run of the next year.  Also, this utility SHOULD BE RUN before you process your 1099s.

What the process does
This utility in Deltek Vision “resets” your 1099 tracking for the next year.  This utility is run from the Utilities menu item in Navigation.   As you process payments for current year, Vision stores the sum of these payments in a field called “Paid This Year”.  This process takes the amount in this field and stores it in a separate field called “Paid Last Year” (both fields can be found in the Vendor Info Center).   When you run 1099s for the year (for example 2012 1099s must be mailed before January 31, 2013), Vision pulls the 1099 amount from the “Paid-Last-Year” field.

If you fail to run this process correctly, the amount paid recorded on your 1099s for the prior year and the current year will need to be updated – manually

Open New W-2 Quarter

2015_deltek_payroll.pngWhen to run
After the final payroll run for the current year, but before the first payroll run of the next year.  Also, this utility SHOULD BE RUN before you process your W-2.

What the process does
For companies using Vision to process payroll ‘in-house’, opening a new W-2 quarter changes where Vision stores payroll information for payrolls processed after opening the quarter.  This one is easier to remember as you are already in the process of opening a new quarter
during the year.  Opening the quarter at year end is JUST like what you do every quarter, except the warning message appears scarier.     

If you fail to run this process correctly, the amount paid for the quarter/year will be incorrect for the last year and the current one.  You will have to manually adjust employees’ payroll history to correct the error for each item paid and withheld.  This meets my definition of a “bad time”.

Deltek Vision Payroll Update (Software update)

After the final payroll run for the current year, but before the first payroll run of the next year.  Also, this utility SHOULD BE RUN before you process your W-2s.

What the process does
For companies using Vision to process payroll ‘in-house’,  the Year-End payroll update updates the tax tables for the new year.   This is a system update.  You will need to work with your IT staff to ensure this update is run at the appropriate time

If you fail to install this prior to running the first the payroll in the new year, it isn’t a huge deal (believe it or not). Deltek Vision calculates the tax due on the year to date earnings and subtracts what has been withheld in prior payrolls to come up with the current withholding amount.  HOWEVER, while you do not have to manually adjust each person’s withholding, it is NOT fun to explain to your staff why their withholdings varied from payroll to payroll.

Open New Benefit Year

When to run
After the last Timesheet has been posted and Benefit Accrual has been run for the prior year, but BEFORE the first Timesheet posting and benefit Accrual has been run for the current period.

What the process does
Running this changes where the accrual information is stored for PTO, Vacation, sick, etc. – any “time” related benefit provided to your employees.  Every month/timesheet/payroll (depending on your policy) you run an accrual for your “time” related benefits.  You see this accrual as “current year accrued” on reports.  As you post timesheets, time taken against the accruals show as “Current Year Taken”.  Running this utility resets the system to -0- for the current year. If you do NOT track your PTO/Sick/Vacation etc. in Vision – this utility does NOT need to be run. This utility is run from the Utilities menu item in Navigation.  

If you fail to run this process correctly, the current year Taken and Accrued will not show correctly.  You will need to manually modify the current year taken/accrued for each employee. 

Open New Period

When to run
Before you process the first transaction for the new year.

What the process does
This opens a new period for processing. You typically do this every month. The only difference between your period opening during the year and the opening at year-end is the scary message. After opening the period,  you will still be able to process transactions in the prior year (assuming you have the appropriate security) or the new year - you just have to be careful to select the correct period.   This utility is also run from the Utilities menu item in Navigation.  

Failing to open a new period causes you to not be able to process transactions
in the new year.  If you process transactions in the prior period you can either un-post them (depending on the transaction) and repost them in the correct period or manually reverse the
entries and reenter them in the new period.  Not great fun, but it could be worse.
If you fail to run any or all of the above utilities, you can recover by manually updating the system. However, with all the other things going on in January with tax filings, audits, year-end financial presentations, who has the time to spare?  Here are some tips that will help to remove some of the worry:

  • Ensure each employee in the accounting/payroll department understands these processes and what they do and the implications – They will help you remember as they often are the ones that have to do the tedious time consuming recovery process
  • Set a calendar with the date of the last processing of the prior year, the date the above utilities should be run and the date of the process of the new year.  Review this calendar with the accounting/payroll staff
  • Assign a person to run the utility and a person to help them remember. 
  • Share the calendar with your IT staff and let them know when you must have the payroll update installed and running
So, plan ahead, set your calendar, train the staff now, sit back and have another cup of eggnog and smile – you have set yourself up for a less stressful January.

For more information regarding a stress free year end, please check out our recorded webinar sessionon this topic.



Latest Posts