Business Analytics, Financial Reporting & Budgeting for High-End Software

From the Dec. 2006 Issue

While reviewing a national survey about the technologies that make the most difference in businesses recently, it was no surprise that Business Analytics (BA) was one of the tools named as a best value investment. It is also no surprise that most high-end accounting software products have interfaces to a BA tool. For your practice, and more importantly for your clients, to be able to achieve their best results, you need to understand and recommend the use of Business Analytics. BA is available for all sizes of accounting software from QuickBooks to SAP, and most systems in between. The trick is to find the right level of BA tool to use and recommend.

Like the accounting software market, I like to break up the BA market into multiple levels of capability. For example, in accounting software, the levels and some example products would include the following:

Entry Level Accounting (ELA) – QuickBooks, Peachtree and Small Business Accounting

• Small to Medium Business (SMB) – BusinessWorks Accounting, CYMA, QuickBooks Enterprise, Peachtree Quantum and NetSuite
• Small to Medium Enterprises (SME, sometimes called High End) – Accpac ERP, Dynamics AX, Dynamics GP, Dynamics NAV, Dynamics SL, Epicor, Macola ES, MAS 90 ERP, MAS 200 ERP, MAS 500 ERP, Open Systems Accounting Software (SAS), Open System TRAVERSE, Pro ERP, SAP Business One, SouthWare and SYSPRO
• Enterprise Resource Planning (ERP) – Lawson, mySAP, Oracle Financials and SAP

All-in-One

Each of these systems has some financial reporting built in, but in most cases, the businesses are well served by adding some additional reporting tools. Of course, Excel is frequently used as a reporting tool, and I expect this to increase with the introduction of Office 2007 because of the focus on analytics by Microsoft in this release. Examples of BA, financial reporting or budgeting tools that can be added include the following:

• Entry Level Accounting (ELA) – Adagio FX, Budget Maestro, ProfitCents
• Small to Medium Business (SMB) – F9, ProSystem fx ProfitDriver
• Small to Medium Enterprises (SME) – Brio Performance Suite, Crystal Reports, FRx, Forecaster, PROPHIX
• Enterprise Resource Planning (ERP) – Business Objects, Cognos, Hyperion

These BA tools can help your clients analyze data and see information that would not even be discovered via traditional methods. Some of the tools can be used to build digital dashboards, exception reports and other key trend reports. A more complete listing of Business Analytics tools can be found at www.accountingsoftwareworld.com/industry/businessanalytics.htm.

In mid-market accounting software, I frequently recommend that multiple tools are selected because different tools do different jobs well. It would be quite common for FRx, Crystal and F9 to be used to perform different, but needed, functions. We recently interviewed users of Microsoft FRx to find out what type of impact FRx had in their business. One specific company is of note here.

Marshall Combs, Controller of White Electrical, which is located in Atlanta, Ga., stated in an interview that his company uses Dynamics SL as well as Microsoft FRx and Microsoft Forecaster. White Electrical has eight locations with approximately 350 employees and a strong growth rate. Mr. Combs found that FRx produced the financial reports that they needed to efficiently run the operation. The company was “printing paper and keeping FedEx healthy.” They decided to create reports that could be e-mailed with details reviewed by managers who could drilldown for more detail. The reports are created automatically on a monthly basis and distributed via e-mail. “FRx is a very powerful piece of software. You can go all the way from simple financials or you can do something that will knock your socks off.” We know that FRx is the primary financial reporting tool of high-end software and continues to evolve to have more business analytics capability.