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March 2018
 

Last summer, International Data Corporation reported that the cloud software market saw $48.8 billion in revenues in 2014 and will continue expanding at a compound annual growth rate of 18.8 percent through 2019.

This is no secret. Regardless of which industry a company might be competing in, cloud-based accounting software can help to drive both the efficiency of processes in finance departments and their accuracy.  If you are finding the following situations, it is time to think of a new cloud-based accounting software:

  • There are too many manual entries and you incur tremendous amounts of time to correct human errors
  • Backup takes too long and a software suddenly gets very slow in processing
  • Too many Excel-based reports
  • Expense reimbursement process is not linked to the software as well as payroll and accounts payable


A cloud based accounting software should solve the above issues. It also makes your accounting more automated, transparent, and prevents fraud.

CDH offers Sage Intacct, the number one customer satisfaction cloud accounting software. Please start thinking of your next step to upgrade your accounting department by talking to us.


Koh Fujimoto, Managing Principal
CDH
 

The biggest accounting standards change since the implementation of the Sarbanes Oxley Act back in 2002 is hitting the accounting profession – a change to the revenue recognition standards. This new standard, known as Accounting Standards Codification (“ASC”) 606- Revenue from Contracts with Customers, is one that will change the face of accounting for almost any business.

Although for private companies this standard is not in effect until fiscal years ending after December 15, 2019 (for December 31 year-end clients, this means it will be effective for December 31, 2019, and for September 30 year-end clients, this means it will be effective for September 30, 2020), companies will need to start planning for these changes now.

Let’s first understand the reason for these changes and then move on to understanding the changes in the standard.

Why?!:

In order for accounting principles generally accepted in the United States (“U.S. GAAP”) to converge better with International Accounting Standards (“IAS”). This new revenue recognition standard, ASC606, mirrors IAS15. What does this mean? For companies that have a foreign parent, the revenue that is recognized under U.S. GAAP will be in compliance with the revenue that is recognized under IAS.  (read more)

 

Over the last two years HR professionals have been grappling with the idea of ditching annual performance reviews.  Historically, both the employees and supervisors dread the annual review process, at the same time, many supervisors believe they have regular contact with their employees therefore there is no need for a formal process.

Unfortunately, according to research from Leadership IQ only one-third of employees reported that they know how well they are performing. 

Annual performance reviews and regular supervisor contact are not sufficient to effectively manage employee performance.  What employees are asking for in addition to clear job expectations is frequent performance feedback.  Especially when their performance is not meeting the company’s expectations.

Although there are reasonably priced performance management software programs designed to support continuous feedback, nothing is more effective than face to face conversations.  Employees are more receptive to receive constructive feedback when it is tied to specific work related instances and given in a timely manner rather than storing up examples to present during their annual performance review.

The key to effective feedback is our attitude about both giving and receiving it. If Supervisors adopt the mindset of a coach when it comes to feedback, the dynamics of the exchange become more positive for both sides.  Consider for a moment that you are an athlete and your coach notices your form is off and it is slowing you down.  (read more)

 

The rising cost of healthcare continues to defy gravity! The cost for the same test or scan from two nearby facilities can be dramatically different.

In the past, benefit plans with low deductibles or copays shielded employees from this cost difference. However, as more and more employers move to consumer driven health plans (i.e. high deductible health plans, health savings accounts, health reimbursement arrangements), it’s imperative that employees are educated properly. The link below provides three ways that employees/consumers can take charge of their healthcare spending.

If you have additional questions, please contact John Jaeger at OneDigital Health & Benefits; jjaeger@onedigital.com

 
Here’s one reason why QuickBooks can’t handle the new revenue recognition rules……

The new revenue recognition rule, ASC 606 takes effect for public companies in 2018 and 2019 for private companies. Here’s how QuickBooks will “handle” the new revenue recognition rules: let’s say a private company writes up a contract in 2018 and it’s a multi-year, extending into 2019 and beyond. Starting in 2019 this private company will need to apply ASC 606 for revenue recognition. In the QuickBooks environment, that means tracking revenue recognition off line via multiple Excel spreadsheets requiring lots of manual tracking and excessive JE’s to recognize revenue under 606. Any contracts where refunds, credits, rebates, penalties, incentives, etc. are utilized have to be treated as 606 compliant based on 2018 (public) or 2019 (private) requirements.

Example: Private company builds a new multi-year contract, starts in 2018, extends into 2019 with a refund of $1,000 on July 1, 2019 – in QuickBooks there are no contracts or automated revenue recognition schedules/templates to build or auto recognize this July 1, 2019 revenue……so it has to be done on a manual Excel spreadsheet and someone has to remember all the customer dates when to create yet another manual JE to recognize this revenue…..this is highly inefficient and not the best way forward.

Sage Intacct automatically handles ASC 606 with its Contracts and Revenue Management modules. Key advantage: Sage Intacct will allow creating two sets of books – one for the current standard and one for the ASC 606 standard. This allows users to capture reporting information under both the current revenue recognition standard and the ASC 606 standard, allowing users to present information in prior periods before and after your company implements the ACS 606 standard. Sage Intacct will also automatically determine scheduled posting dates in revenue schedules according to the recognition method in the associated revenue template.
 

For more information on how Sage Intacct can help your company with the new revenue recognition rule please reach out to Barry Coyne.

 
CFO Panel Discussion with Marc Linden

By:  Intacct Staff Writer
 

Marc Linden, SVP and Head of Business Operations and Finance at Sage Intacct, recently moderated a panel with a number of experts to discuss the role of the CFO, global trends, challenges, and opportunities in the space. Be sure to read this post for interview-style highlights of the session with Alan Hurwitz, CFO at Continuity; Doug Boughton, CFO at Smith System Driver Improvement Institute, Inc.; and Tauni Manasse, CFO at LeaseLabs.

Marc Linden: I’d like to welcome everyone in the audience. Panelists, thanks so much for joining.  Let's start with question number one: When you get asked by the CEO or the board, "Where are we with cash now and where we expect to be in the future?" what tools do you use to answer this question?

Alan Hurwitz: We are using the tools historically on all the information that we can get on the GAAP accounting information out of Sage Intacct, obviously. We've been on Sage Intacct for a couple of years and we haven't gotten to the point yet where we're using the statistical capabilities, but I'm looking to get that going.

We also have Salesforce so we can be pulling in other non-GAAP information related to sales performance, which is a key factor in understanding where cash is going to be in the future.  (read more)

 

Over the years I have worked with a number of companies in the consumer products arena.  One of the critical topics of discussion is always product line profitability.  Which of our products truly contribute the most to our bottom line?  In connection with the issue of profitability is how can we seamlessly introduce new products that do not cannibalize the existing products and therefore thus creating an obsolete inventory problem.

Many companies are very good at introducing new products but not so adept at trimming the products that do not contribute substantially to the profitability of the company.  I regularly encourage my clients to go through a product line pruning exercise by calculating the gross margin return on inventory “GMROI” by product line.  This is simply multiplying the gross margin % of each product by the annual turnover rate of that product. 

Sometimes managers overstate the importance of an individual product line by evaluating products based on the gross margin % solely.  The real opportunity in terms of dollars is that gross margin and how many times per year you generate those dollars (e.g. the turnover rate).  
(read more)
 
Join us at this networking opportunity
for a presentation on
Product Liability!
When:
Thursday, April 26th from 7:30 AM - 9:30 AM

Where:
J.C. Restoration Auditorium
3200 Squibb Ave
Rolling Meadows, IL 60008


RSVP today!
 

Failing To Succeed


By:  Tony Szczepaniak


I recently learned of an exhibit making its way through the US, on loan from a Swedish museum.

The exhibit, "The Museum of Failure", is partially funded by the Swedish Innovation Authority and provides a learning experience around failure and the importance of risk taking in products and service innovation.

While never pursued as an outcome, failure is inevitable in business and in life. The consequences can be negative and may require immediate, corrective action; however, it often leads to new insights that only become evident because of failure. To this end, failure is a positive catalyst for learning and growth. In corporate cultures where innovation is valued, failure is embraced and even expected as a requisite condition for creation.

Although there are many ways to analyze failure in a professional setting, and there is much thought leadership written on the subject, my simplification of the matter is to categorize it as either avoidable or unavoidable.  (read more)