“We change our tools and then our tools change us.” – Amazon CEO Jeff Bezos
A doctor wouldn’t use outdated or partially implemented technology in the exam room. Why should that be accepted in the business office? Most business applications include features that simplify collecting and using data. We work with our clients to set up these business tools so that the information can be utilized.
As a CPA firm, we help clients implement technology to streamline business processes. We want to minimize the time spent on data entry and maximize the value of the information that’s retrieved. Timely information from Key Performance Indicators (KPI) is critical to making strategic decisions for your business. So what should you be looking at? Glad you asked!
Most Important Key Performance Indicators (KPIs)
What financial KPIs do you look at every month? Every week?
Revenue and expense KPIs should be easy to see in your accounting system. Overhead and owner compensation are also typically available in this tool. Some practices focus on specific high-dollar expense lines like clinical supplies or staff compensation.
Other financial KPIs that may be more difficult to track in your accounting system include accounts receivable, net collection ratio, and gross collection ratio.
Operational KPIs also provide important insights. Operational KPIs include overall charges or billings for the period. Perhaps you look at the number of specific procedures or activities. New patients are the lifeblood of every growing practice — how many new patients did you see this month? Maybe you look at the volume count for a specific procedure to gauge the effectiveness of your practice.
Operational KPIs are not typically tracked in an accounting system. However, they could be provided with a monthly management report. You’ll be able to answer the question: what procedure is the best indicator of your practice’s success?
KPIs provide even more insight as a relative measure. How many new patients did I see last November compared to this November? How much did charges and collections spike last December compared to this December? If I plot my KPIs, are they trending in the right direction?
Generating this sort of information may sound like an arduous task. We can help you set up your system so that this information is easy to see. You’ll be freed up to focus on managing your business rather than managing your data.
We have all encountered so much business disruption this year that, at some points, a clear view of your KPIs may not have been inspiring. Despite this, at some point in 2020, every business owner has needed to assess where they are and where they want to go.
How much more quickly you would have been able to respond if your business tools were set up to provide this information every month or even every week or every day?
Technology Tools That Can Streamline Your Financial Processes
We encourage every client to use online tools. When you use an online accounting system, it is available to you any time you have a question. You don’t have to drive to the office. You don’t have to call someone.
We are also better able to serve our clients in an online environment. This eliminates the challenges created by transferring files. It allows us to see exactly what you are seeing and to help you make sense of it, or to fix it.
We recommend using these tools:
- Use an online accounting system.
- Pick a payroll service that has an integration with the accounting system you use.
- If you provide a 401k or other employee benefits, consider services provided by your accounting system or payroll provider.
Pick tools that work together, eliminating the aggravation of entering data. If set up correctly, they should minimize the frustration that comes with fixing the data you already entered.
1. Online Accounting Tools
We’ve been successful in setting up Xero and QuickBooks Online for clients. We set up clients with a standard chart of accounts specific to their type of business. We also set up standard reports that can be easily accessed to evaluate performance.
Both of these online accounting systems allow you to sync with and download bank activity. Downloading this activity can significantly streamline data entry that comes with all accounting systems. Both systems also allow you to set up rules to easily classify each transaction you download. When all of this is set up correctly, you can access real-time information to track performance and understand the health of your business.
2. Payroll Systems
Imagine how much work you could eliminate if you pick a payroll system that integrates directly with your accounting system. When you process payroll, the entry can automatically post.
Now imagine if that payroll system also offers employee self-service that allows employees to update their address, bank account, or their withholding, and even make changes to their 401k. Most modern payroll systems include an employee portal where employees can retrieve their paystubs and W-2s.
We’ve also found success implementing OnPay and Gusto for clients. Both of these packages offer the features described above, and each of the solutions includes other features that would probably impact your choice.
3. Employee Benefits
A 401k offers a small business owner one of their most powerful tools to reduce taxes and to save for the future. But, you may find that a lot of 401k providers and the required decisions can be overwhelming if you are unfamiliar.
Then, once you’ve picked a provider, the effort to support the plan and keep up with your required contributions can be cumbersome. In recent years, even 401k plans have migrated to the Internet.
If this is a benefit you want to implement, this will affect your decision on payroll services. Look for a 401k with a commitment to using technology and an interface with your payroll system.
Call Us to Make Better Use of Technology in Business
Using the right technology can be a breeze. Choosing and implementing it is the hard part. The result, though, is a positive change, just like Jeff Bezos said. We’re here to help you make this change.
We help clients implement processes that will provide financial and operational information necessary to managing the business. We believe technology is the key to an efficient business office. Our goal is to maximize the use of technology to eliminate repeatable, manual work. We strive to elevate the process to focus on review and discussion rather than data entry.
We’ll start where you are by understanding what technology you are currently using in your business. Then, we’ll help you take the next steps choosing and implementing the best available technology to improve your business and streamline financial processes. Then, you’ll be in the best position to view financial performance, track progress, and make decisions.
Call us. We can help.