Virtual Accounting: A Strategic Inflection Point
So you have heard of the new trend being called Virtual Accounting in our article “Virtual Accounting: A New Paradigm”.
Now we will look at the reasons “Why” virtual accounting is good for your business.
Have you ever heard of a “Strategic Inflection Point”? A strategic Inflection Point is a time in business when things are about to change. That change may mean an opportunity to rise to new heights, or be the beginning of the end. Here is a visual of an inflection point…
Joan Donogh wrote a review of a book “Only The Paranoid Survive”, written by former Intel President and CEO, Andrew S. Grove’s. In the review, Donogh paraphrases Grove’s take on a Strategic Inflection Point,
"Strategically, an inflection point occurs when the old strategic picture dissolves, and gives way to the new, allowing a business to soar to new heights. Unfortunately, from the inside, it is not evidenced as a pinpoint in time when everything changes, but rather a long period of extreme unrest. Corporate statements and operational actions are not aligned. Ideas about the right direction will split people on the same team. In a workplace that used to function collegially and constructively, holy wars will erupt. Chaos reigns."
In my opinion, The Business world is at a strategic inflection point when it comes to accounting and information systems solutions, and more specifically, back office solutions. We are at a point where we either move to adopt new technologies in cloud based computing, or we hold on to the “tried and true” methods that are more comfortable to us. I am a believer that moving to a Virtual world where cloud based computing and solutions, such as Virtual Accounting, are the upside of the point. The downside would be to hold on to the comfortable way of doing things and eventually lose relevancy.
Here is a real life example…
Do you remember a once innovative company named Smith Corona? Smith Corona was once known as an innovative leader in the word processing industry with their progressive development of the typewriter. Unfortunately, this happened…
According to Wikipedia, Smith Corona was…
Once a large U.S. typewriter and mechanical calculator manufacturer, it expanded aggressively during the 1960s to become a broad-based industrial conglomerate whose products extended to paints, foods, and paper. The mechanical calculator sector was wiped out in the early 1970s by the production of cheap electronic calculators, and the typewriter business collapsed in the mid-1980s due to the introduction of PC- based word processing.
What is interesting was a comment made by then CEO of Smith Corona, G. Lee Thompson, to the Wall Street Journal in November 1992, many years into the PC penetration and the market downfall of the typewriter. Thompson told the Wall Street Journal “Many people believe that the typewriter and word- processor business is a buggy-whip industry, which is far from true. There is still a strong market for our products in the United States and the world.” Regarding the development of new products and services, he replied, “Nothing right now. They’re still in the formative stages.”
Smith Corona is a great example of the downside of the Strategic Inflection Point. It is one thing for Smith Corona to fail, but what remains untold are the countless small businesses that believed the CEO and maintained using the typewriter in their business instead of transitioning to the new technology. Some of these businesses missed the boat and collapsed, while others would have put themselves way behind the eight ball in terms of having a competitive cost structure.
To refresh, Virtual Accounting is a change in the way we execute the function of accounting services. It is the use of cloud based technologies to execute the functions of the back office processes, as well as accounting and finance processes, including bill payment, collections, payroll, tax remittance, transactional processing, CFO services, Controller services and many more. It allows accountants to perform all the regular duties required of them, remotely, by utilizing best in breed technology and cloud computing and communications.
Virtual Accounting is the up side decision at the Strategic Inflection Point. There are various reasons for this, some of which are listed below:
1) Your information is always up to date
2) You will incorporate Best Practices using our tried and true methods and procedures in accounting
3) You will be able to rest well at night knowing all your tax returns are filed on time and accurate.
4) Your sensitive business data will remain confidential and secure, and accessible 24/7
5) You will have confidence in knowing your books are handled by accounting professionals, freeing your mind and time to do what you do best.
6) You will enjoy a quick turnaround time on questions, concerns and queries.
7) You can benefit from convenient and efficient virtual meetings scheduled online and accessible from anywhere.
8) Small businesses do not need additional support staff as they grow. Save time and money by limiting support staff and cutting travel, query and other expenses.
9) You will always have access to best in breed, cutting edge software and technology
10) 24/7 access to data, information and documents
Now I will admit, as a member of the accounting profession for a number of years (I started young), I had a difficult time getting my head around cloud technology. As I spent time understanding it, I now realize there is a huge shift here in the business world; and cloud based technology is it. I implore readers to embrace the change. Please hear the sounds of the new change coming and respond quickly.
Do not become like Smith Corona, or worse, like the businesses that failed because of listening to the then CEO of Smith Corona. Today is the first day in a new journey for you. We can help you walk through the transition and ease your fears, create a transition plan, and build a firm foundation that will be well on its way to being ahead of the curve.
About the Author
Gerard Jones is a Chartered Professional Accountant and is President and CEO of Atlantic Canada’s first Virtual Accounting firm, BAGE Tax and Accounting Inc. Gerard is very well versed in understanding the intricacies and challenges that small and medium sized businesses face in the 21 century. Gerard's passion to see small business thrive in the 21 century fuels his determination and can do attitude. He balances knowledge gained through practical experience with common sense learned through professional life, to design an affordable solution to ANY business.
If you are a business looking to improve efficiency in your back office, achieve cost savings, embrace technological advances and want to benefit from a new "paradigm", please reach out to Gerard, or BAGE Tax and Accounting by email, phone, or visit www.bage.ca .
Gerard guarantees a cost savings for all new clients. Typical savings will average 25%.
Call now at (902) 407 4204 or email firstname.lastname@example.org