The Exuberant Accountant - Scott Heintzelman

Why LEAN Really Matters

 No this is not a blog post about losing weight or getting leaner, rather it is about LEAN Accounting. My colleagues over at the LEAN Accounting Blog recently published a great article on Why LEAN Really Matters. Many people do not understand LEAN Accounting and I believe if they did they would be more profitable. 

The purpose of LEAN Accounting is to support LEAN practices as a business strategy. It seeks to move from traditional accounting methods to a system that measures and motivates excellent business practices in the LEAN environment. LEAN is a process that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for. 

 

Contractor Issues and Best Practices to Not Only Survive, But to Thrive in the New Normal

 Economists use the term “new normal” when describing what the recession has done to our economy. One segment of our economy which has been profoundly affected by this recession is the construction industry. To help our firm better understand what our construction clients are experiencing, we recently conducted a survey of over 300 contractors, banks, bonding companies, and others dealing with this unique faction of our economy.

As promised, below you will find the results of the survey as well as ideas, best practices, and techniques members of the construction industry are using to not only survive, but thrive.

The results are broken down into five main categories with the main issues bulleted:

Are Big Changes on the Horizon for US Accounting Standards?

 Last week I attended our FEI (Financial Executives International) Chapter meeting and our special speaker was Robert Herz, the recently retired Chairman of the FASB (Financial Accounting Standards Board).

He shared many insights into what is happening in the world of GAAP (Generally Accepted Accounting Principles) and International Standards.

I will not share all the technical items he shared, as that part of what we CPA’s do can be a little boring, but I thought he had a few really key points that would impact business leaders.

First, he re-affirmed that some form of IFRS (International Financial Reporting Standards) is coming (although probably not next year). He also indicated what will be adopted would probably not be as uniform as some in the world would desire, but likely the beginning stages of a somewhat consistent international accounting standard. He recognizes that this means significant changes to American businesses.

What Makes a Company Great – The Secrets of Small Giants

What role does Mojo (the business equivalent of charisma) play in making a company great? Would any business choose to be small over being big? Well, according to Bo Burlingham’s new book, Small Giants – Companies That Choose to be Great Instead of Big, many are making that decision and with wonderful success.

Today, I had the privilege of attending Bo’s session on what makes a company great at the S. Dale High Center for Family Business. I found him to be an excellent speaker and thought he shared many valuable insights. 

As Bo was doing research for his book, he wanted to find if there were companies in America that were “Small Giants.” Companies that he called great, but chose to not necessarily grow at any cost. He listed 6 criteria to be considered for his book:

Should I Sell My Business?

In the past few months, I have been asked by numerous business owners if they should sell their company. In most cases they have reached a point of “overload syndrome” and running the company is no longer fun. The downturn in the economy has caused them to work harder and take home less money. 

 

They are facing even greater government regulations and scrutiny and the joy of owning the business is fading. The prospects for higher taxes and an even greater drop in the return on investment (of time, money and energy) is weighing them down. They probably have some business broker or synergistic buyer inquiring if they are interested in selling.

  

When they finally ask me, they have often spent countless hours laying awake at night thinking about what it would be like to not own the company. The business is often their identity. I wonder if they hope I talk them out of “these crazy thoughts.”  My standard response is to ask them why they are thinking about selling the business. I want to hear their reasoning and then I can usually help them process their thoughts.

 

Of course, there is no correct answer to this difficult question, but certain things need to be considered. Here are several key things to consider before you decide to sell your business (several from The Business Sale System Book):

Questions to Assess Corporate Performance: Setting Your Business On the Right Course

In preparation for my upcoming discussion group about Thriving in the New Normal, I have been doing some thinking, reading and collecting of ideas for ways to improve corporate performance.  According to the 2010 U.S. Bank Small Business Survey, nearly 90 percent of small business owners across the nation say the economy is still in a slump and 75 percent expect the recession to continue into next year.

 

If there is a new normal and consumer spending has been reset for the next few years (or more), what can organizations do?  Maybe it's time to take a good look at your company's operations with an eye toward giving it a tune up. Think in terms of striking a careful balance between cost cutting, new spending and improving operational efficiency.

 

Focus on the fundamentals by answering some performance questions like these:

Forced Employee Engagement and the Overworked Employee

Has your organization reduced its workforce during this recession? Have you asked more of your employees? Are your employees working harder and performing at a higher level?

 

A recent survey of employees finds that the average “job footprint” (what a worker is expected to do) has increased by a third since the beginning of the recession. The reward for all this extra effort is mostly frozen pay and reduced benefits.

 

In my many interactions with business owners, I have heard some speak of employees as being “lucky to still have a job.” While that may be true, thinking (and acting) in such a manner is very short sighted.

 

I recently read Deloitte’s Annual Workplace Survey and one-third of employed Americans plan to look for a new job when the economy gets better. What is interesting is that half of those planning to leave state the reason is a “loss of trust in employers.”

Security and Fraud Prevention Seminar

Our firm will be hosting a Security and Fraud Prevention Seminar on Friday, September 24, 2010. We are very fortunate to have as our keynote speaker, Scott Sutherland, Special Agent of the FBI. He is a dynamic speaker and will share some of the frightening current trends in cyber crime, but he will also give you practical steps to protect your business.

 

I will be emceeing the event and hopefully attendees will learn more about….

 

· Current trends in cyber crime and identity theft, along with a discussion of the methods you can use to protect yourself from being a victim.

· Resources available to prevent attacks on critical infrastructure and how to report suspicious activity.

· The components of fraud, identification of red flags, and other fraud prevention tips related to financial institutions.

· Electronic tools that banks offer in order to provide protection against attacks on customer accounts (including such things as ACH Fraud Review, Positive Pay, Check Block, etc.).

· Practical security and the 10 Tips for Success.

· Mortgage fraud.

 

Our speakers include:

 

Scott Sutherland, Special Agent of the FBI

David Clark, FBI - Harrisburg

Julie Krause, Regional Manager - Treasury Management at M&T Bank

Tom Strause, Partner with Financial Outsourcing Solutions

David Hammarberg, IT Director with McKonly & Asbury

 

If you would like more details, please contact me.

Buff Up Your Business Before Putting it on the Market - Positioning Your Business For a Future Sale

The McKonomics Blog just posted a great article about positioning your business for sale.  I think this is valuable information and wanted to share here.

 

As the economy rebounds, the Merger & Acquisition markets will continue to heat up. Although some buyers remain cautious, others are scooping up businesses -- in some cases, at a premium. If the thought of selling your company has crossed your mind, now is the time to begin positioning your business for a future sale.

 

In a best-case scenario, preparations should begin months, even years, in advance. Even if you must sell quickly, it's important to avoid the appearance of a distress sale. You should begin as soon as possible to get your business in shape so you can maximize the price.

 

Here are a dozen questions to consider:

Would Your Business Reopen if Struck With Disaster?

Here is a great checklist from our friends at the RMC (Risk Management Control) Advisors Blog.  I am reposting the entire article, but you can click this link to read on their website.

 

If your answer is “I am not sure” or “No”, read on to learn some small steps you can take to increase the likelihood that your business would reopen. According to the American Red Cross, as many as 40 percent of small businesses do not reopen after a disaster!

 

Within the last month, two friends have told me about two separate disasters caused by malfunctioning air conditioning systems. In both cases, there was extensive water damage on multiple floors destroying papers and electronic equipment. In one case, over 100 people were displaced and in the other, about 20 were displaced. Fortunately, due to having business continuity plans in place, they were able to react in a quick and efficient manner.

 

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