The modern evolution of accounting: QuickBooks Online Advanced
If you reflect on the history of the modern accounting profession, you might be surprised to see how far the profession has come in such a short period of time. Prior to the introduction of computerized accounting, growing businesses often required multiple staff members to handle the very manual processes, making it very expensive to generate advanced reporting. While the introduction of computers provided companies the ability to reduce the size of their accounting departments, they were not without their own drawbacks.
Business owners now have the ability to gain valuable insights into the operations of their company, as long as the accounting platform provides the data they need. Without the rich app environment that exists today, these limitations often defined the previous workflow of the accounting process.
The second technological evolution in accounting – the journey to the cloud – made it possible for small companies to customize their accounting platform to match their workflow needs. The release of QuickBooks® Online and Intuit’s® app marketplace signified the transformation from an all-in-one accounting platform to an app-centric accounting environment that promotes the use of third-party connections that are unique to the business profession.
While the small business sector is far from reaching a point of market saturation, Intuit’s commanding lead over its competitors has allowed the tech company to expand the focus of their product development to include a cloud solution designed for growing businesses.
For the past 17 years, Intuit has been servicing growing businesses through its QuickBooks Enterprise product, a robust desktop-based application. When Intuit first entered this space, they realized that larger companies required unique tools designed to handle their workflows. Ironically, those same features that made QuickBooks Enterprise such a powerful solution also became a barrier to entry to the cloud accounting world.
Much like its predecessor QuickBooks Desktop, Intuit focused the evolution of QuickBooks Online on the smaller businesses before introducing their QuickBooks Online Advanced solution. Very similar to those smaller businesses, growing businesses were looking to improve the quality of their data through digitization, while eliminating inefficient procedures and excessive cost.
A recent study conducted by The National Center for the Middle Market (NCMM) found that executives of mid-market, growing businesses were asked how much they agreed with the following statement: “Our organization’s digital vision is clear and comprehensive, widely understood, and used to guide executive decisions.”
Companies with executives that strongly agreed with the statement grew an average of 10.6%, while to companies that were unsure or disagreed only grew by 6% during the first quarter of 2019. This 4.6% variance represents the growth that these tech-forward companies achieved through their process improvements.
The same survey conducted by the NCMM found the strong growth (8.7%) in the first quarter was led primarily by business services, healthcare, and construction industries. With the launch of QuickBooks Online Advanced, these growing businesses can utilize Intuit’s newest features, while also leveraging the extensive app marketplace to custom design their workflow.
Previously only available through QuickBooks Enterprise, new features such as advanced user permissions, batch invoicing, and custom fields (my personal favorite) have helped to remove the barriers of entry that previously kept these growing businesses out of the cloud.
The workflow-enhancing features of QuickBooks Online Advanced
You may think I am strange, but there is something very fulfilling about taking on a big clean-up job and transforming it into a masterful accounting workflow. While it’s possible to structure project work like this into a very repeatable process, there will always be a portion of the job that is unique to the company itself. This is the point where accounting principles and advancements in technology intersect and the fun of workflow design begins.
Among the numerous features built into QuickBooks Online Advanced, custom fields have presented the most significant impact while designing custom workflows. Previously, we were limited to using a custom text field that allowed anything, including typos, to be entered.
Software development house
Among the many workflows we have designed, one of my favorite projects was for a software development house. The project had many different layers of complexity that required custom reporting based on non-accounting specific variables.
- Business hires subcontractors across six countries.
- Recruiters are paid commissions on developer hours worked (total hours vary by contract).
- Some subcontractors are hired through preferred vendors who bill for their time.
- Not all hours are billable to a client, but all must be accounted for.
- Business has multiple sales associates and wishes to track sales by person and by region.
- Business developed their own time tracking software .
- Business had billing cycles, such as Pay as You Go, milestone billing, and bi-monthly billing cycles.
- The business requires customized monthly financial reporting packets.
When we first onboarded this client, Intuit had not released QuickBooks Online Advanced at the time so we used QuickBooks Online Plus, which limited our use of custom fields to three text fields only. Additionally, the limited user permissions required our internal team to process more of the daily transactions to avoid sharing the company financial position with employees who should not be privy to such information. As we continued to build out the preferred custom workflow for this client, the new information being presented made it clear that we needed to create profession-specific key performance indicators.
Fortunately, the introduction of QuickBooks Online Advanced presented immediate solutions for our biggest challenges. By utilizing the new custom drop-down fields, we were able to eliminate the issues caused by data entry typos, while tracking the following:
- Sales representative at the customer and project level.
- Region at the project level.
- Assigned recruiter to track hours per developer through purchase orders.
- Utilize the customer type to define the billing cycle.
- Utilize the customer type to define special pricing rules for projects.
- Track referral channels by client.
These minor changes immediately reduced the amount of time our firm spent each month cleaning the data entry to make the information useful for reporting. Additionally, it allowed us to calculate commissions owed to the sales associates, project managers, and the outside recruiters.
Due to the improvements to advanced user permissions, we were able to teach a member of the internal staff how to match up the deposit details within the banking center without also providing access to additional financial information, such as account balances.
“Companies whose executives consider analytics to be extremely important are 25% more likely to have achieved double-digit growth last year than the average. Three out of 10 of these companies grew 10% or more.” – The National Center for the Middle Market
Without a doubt, QuickBooks Online Advanced made it possible for our team to enhance the quality and timeliness of information we present to our client. It has provided us the opportunity to implement stronger compliance procedures, while also presenting the owners with the information they need to continue to grow their businesses.